Walmart’s battle with Amazon has new fronts: Digital ads and A.I.

Walmart the biggest retailer in the world is doing a lot more than just selling groceries — likely a lot of things you don’t even realize. CEO Doug McMillon says the company is on track to become more of a “digital enterprise.”

It’s testing a retail lab in New York using artificial intelligence. It recently, for an undisclosed amount, acquired Silicon Valley-based Polymorph labs, with the goal of using the start-up’s technology to make advertising with Walmart easier for small brands.

In February, it bought Aspectiva, a start-up that looks at a customer’s browsing behavior and helps make product recommendations, again not disclosing the cost of that deal.

It’s adding veterinary clinics to its stores and runs an online pet pharmacy now. And it continues to incubate its own brands — during the latest quarter it launched one that sells home furniture, called MoDRN.

In many ways, Walmart is becoming more like Amazon, as Amazon becomes more like Walmart by opening stores and trying to sell more groceries. Both companies are trying to hold their own in the industry.

While Amazon accounts for roughly 50% of all e-commerce sales in the U.S., Walmart is gaining ground. It surpassed Apple in 2018 to become the third-largest online retailer in the country, trailing only Amazon and eBay, according to eMarketer.

In addition to all the work it’s doing in its bricks-and-mortar stores, Walmart also thinks it can own a bigger and better advertising business, rivaling Amazon’s.

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