Amazon and Walmart are leveraging GenAI technology to lower the costs for their suppliers. In their race for retail supremacy, Amazon and Walmart are deploying generative artificial intelligence throughout their supply chains to reduce costs and increase profits.
Amazon recently detailed in a June 3 blog post how it uses AI at several of its sites to minimize returns through its "Project PI" model. This program, which acts like a detective by scrutinizing products for defects before shipment, employs computer vision and generative AI to examine aspects like size and color while identifying the root causes of issues to prevent future defects. Amazon plans to expand this technology to other sites throughout the year.
Dharmesh Mehta, Vice President of Worldwide Selling Partner Services at Amazon, emphasized the goal of providing an optimal customer experience: "By using AI and product imaging in our operational facilities, we can effectively detect potentially defective products and resolve these issues before they impact customers, benefiting our customers, business partners, and the environment."
Walmart, on the other hand, integrates AI even earlier in its supply chain, notably to automate negotiations with its suppliers using a chatbot developed by Pactum AI. This initiative has significantly reduced negotiation times from several weeks or months to just a few days, as explained by Darren Carithers, Senior Vice President of International Operations at Walmart.
According to the PYMNTS Intelligence Whole Paycheck report, Amazon maintains a lead over Walmart in terms of market share across various retail categories, capturing 10% of total consumer spending compared to Walmart's 7.3%.
These initiatives to integrate generative AI aim to reduce costs and improve profitability. In the first quarter of the year, Amazon reported a net profit of $10.4 billion, while Walmart achieved a profit of $5.1 billion. As these companies continue to deploy generative AI in their operations, these technological advances are intended to enhance operational efficiency and profitability.
According to the PYMNTS Intelligence "Working Capital Tracker®" results, 84% of business executives believe that generative AI will have a positive impact on their workforce.
In summary, Amazon and Walmart are actively using generative AI to optimize their supply chains, thereby reducing costs and strengthening their competitiveness in the retail sector.
Source: PYMNTS
