Walmart monitors stores with AI

LEVITTOWN, N.Y. -- Who's minding the store? In the not-too-distant future it could be cameras and sensors telling almost instantly when bruised bananas need to be swapped for fresh ones and more cash registers need to open before lines get too long.

Walmart, which faces fierce competition from Amazon and other online retailers, is experimenting with digitizing its physical stores to manage them more efficiently, keep costs under control and make the shopping experience more pleasant. On Thursday, the retail giant officially opened its Intelligent Retail Lab inside a 50,000-square-foot Neighborhood Market grocery store on Long Island.

Thousands of cameras suspended from the ceiling, combined with other technology such as sensors on shelves, will monitor the store in real time so workers can quickly replenish products or fix other problems.

The technology will also be able to spot spills, track when shelves need to be restocked and know when shopping carts are running low. Cameras, for example, can determine how ripe bananas are from their color, and workers will get an alert on their phone if they need to be replaced.

Walmart's deep dive into artificial intelligence in its physical store comes as Amazon raised the stakes in the grocery business with its purchase of Whole Foods Market nearly two years ago.

That's put more pressure on Walmart and other traditional retailers such as Kroger and Albertsons to pour money into technology in their stores. At the same time, they're trying to keep food prices down and manage expenses. Amazon has been rolling out cashier-less Amazon Go stores, which have shelf sensors tracking the 1,000 products on their shelves.

Walmart's online U.S. sales are still a fraction of Amazon's online global merchandise empire, which reached $122.98 billion last year. But Walmart said more than 140 million U.S. shoppers visit a store in person or online per week, creating a treasure trove of data. In its latest fiscal year ended Jan. 31, Walmart generated more than $500 billion in overall sales globally.

Walmart hopes to start scaling some of the new technology at other stores in the next six months, with an eye toward lower costs and thus lower prices. As the shopping experience improves, the retailer expects to see higher sales.

"We really like to think of this store as an artificial intelligence factory, a place where we are building these products, experiences, where we are testing and learning," said Mike Hanrahan, CEO of Walmart's Intelligent Retail Lab and co-founder of Jet.com, purchased by Walmart three years ago.

Hanrahan says the cameras are programmed to focus primarily on the products and shelves right now. Sensors embedded in shelves will give the store extra information because they know what's at the back of the shelves the cameras can't see.

Cameras do not recognize faces, determine the ethnicity of a person picking up a product or track the movement of shoppers, he said.

Some other companies have recently started experimenting with store shelf cameras to guess shoppers' ages, genders and moods.

There are signs throughout the Neighborhood Market educating shoppers about how it is being used as a lab. Still, the cameras could raise privacy concerns.

"Machine learning fundamentally finds and matches patterns," says Steven M. Bellovin, a computer science professor at Columbia University and a privacy expert, who hasn't seen the new Walmart AI Lab. But he said companies run into trouble when they start to match behavior to a specific customer.