A company as large as Walmart (NYSE:WMT) is undoubtedly using AI to automate parts of its business, such as inventory management and e-commerce fulfillment. If other retail stocks want to keep up with the world’s largest retailer, AI is not optional.
Who else is using AI to strengthen their businesses and grow sales?
“As we look to the future, it’s going to happen a lot faster than people can imagine once it’s all over. We’re talking a 3-5-year type of time horizon,” Gerald Storch, CEO of Storch Advisors, told CNBC in May.
“It’s going to change everything. You start with the top line, where you really make all the money. AI is going to help us predict what’s going to sell and what’s not going to sell, and it’s even going to design those products.”
It is an interesting 5-minute interview. I highly recommend it if you follow retail stocks and AI.
Inspired by Storch’s comments, here are three retail stocks already leveraging AI for growth.
Visa (V)
In many ways, Visa (NYSE:V) is the ultimate retail stock. In fiscal 2023 (September end-of-year), the company processed 212.6 billion transactions worldwide, 10% higher than a year earlier—many of them for retail stores.
Visa and its peers work diligently to minimize fraudulent use of its products. AI is helping payment processors detect fraud faster. On March 27, Visa launched three new AI-powered solutions to its Visa Protect suite to help stop fraud. Over the past five years, it has invested $10 billion to help minimize fraud on and off the Visa network.
Last October, Visa launched the $100 million Generative AI Ventures Initiative to accelerate its efforts in generative AI. The initiative will invest in companies developing generative AI technologies.
Visa’s investments in AI are just one of many reasons to own V stock over the long haul.
Amazon (AMZN)
There are many ways a company the size of Amazon (NASDAQ:AMZN) could use AI to improve its business and create value for its customers. In 2023, Amazon invested $85.6 billion in technology and infrastructure, up 53% from $56.1 billion in 2021.
One example of how it uses the technology is Project P.I. Using a combination of generative AI and computer vision, its fulfillment operation can detect issues with a customer’s order, such as a defective product or incorrect size or color.
TechCrunch recently highlighted Amazon’s work with AI voice search to make its Fire TV devices more helpful to users.
“The AI understands natural language and phrases, and can answer specific queries like, ‘Which movie has the line “Life is like a box of chocolates?”’ (‘Forrest Gump,’ by the way). It can also pull up options based on the actors, characters, genres and topics,” TechCrunch contributor Lauren Forristal wrote on May 30.
Over at the very profitable Amazon Web Services business, AI is written all over the operations. TechTimes reported that Amazon is working with Formula 1 to design an AI-created trophy for the winner of the Canadian Grand Prix.
How cool is that?
Home Depot (HD)
Home Depot (NYSE:HD) has been using AI and machine learning on its Home Depot app for years. In August 2018, it detailed five technologies changing how we shop. Nearly six years later, its AI focus has only gotten more serious.
In May, DailyMail.com showed how Home Depot uses AI, computer vision and cameras to spot the risk of theft and alert management.
“Computer vision can identify complex carts or high value carts and signal a cashier to help the customer with their basket to ensure all products are scanned and accounted for,” stated Home Depot Senior Executive Vice President Ann-Marie Campbell.
It has been so successful that the company is using the technology to warn managers about messy shelves and damaged products. Given how many cities are adding cameras to their streets, it hardly seems like Home Depot’s use of computer vision is a significant violation of one’s privacy.
But, hey, I’m not paranoid. It is what it is.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.