How AI Revolutionized Retail By Rethinking Supply Chains

AI is no longer just a buzzword for tech companies—it’s reshaping the retail landscape as we know it. Retail giants like Lowe’s (LOW), Walmart (WMT), and Amazon (AMZN) are harnessing the power of AI to optimize everything from store layouts to supply chains, per CoStar.

For Lowe’s, AI is helping store managers monitor real-time inventory, test new store layouts, and alert employees when something needs attention, all through a virtual “digital twin” of each store.

But Lowe’s is just one example of how AI is transforming how retailers operate and interact with consumers.

Revolutionizing Store Management

Lowe’s, the home improvement leader, has expanded the concept of digital twins—3D virtual replicas of physical spaces—across its entire network of 1.7K stores. Using AI-powered tech, Lowe’s can track in-store conditions, test new layouts, and even monitor inventory without stepping foot inside the store.

These interactive digital twins are continuously updated with real-time operational data, enabling store managers to identify problems like falling boxes or low stock in specific aisles from headquarters in Mooresville, North Carolina.

Azita Martin, Vice President of Retail and Consumer Goods at Nvidia, explained at the National Retail Federation (NRF) conference that digital twins can simulate different store configurations before any physical changes are made. This can help retailers like Lowe’s optimize their store layouts without the hefty costs and disruptions of traditional remodeling.

Walmart and Amazon Lead The Charge

While Lowe’s is advancing in-store operations, Walmart and Amazon drive AI innovation in their supply chains. Walmart, for example, is using AI-driven robotics to automate fulfillment at its regional distribution centers and has partnered with Symbotic to expand this technology.

The retailer is also utilizing its physical stores as micro-warehouses, positioning them for last-mile delivery—an essential step as e-commerce demand rises.

Meanwhile, Amazon has been using AI to enhance its warehouses with robotics that improve inventory management, speed up order fulfillment, and even assist in customer service. Doug Herrington, CEO of Amazon Worldwide Stores, said at NRF that AI’s impact on logistics is already “everywhere,” helping to optimize mobile robots and manage traffic in Amazon’s vast fleet.

Enhanced Customer Experiences

AI isn’t just transforming back-end operations—it’s also changing the customer experience. Walmart and Amazon are testing AI-powered shopping assistants in their apps to help guide customers, answer questions, and speed up the shopping process.

Similarly, Lowe’s uses AI to analyze product placement and consumer behavior in its digital twins, allowing the retailer to adjust store layouts based on what products are selling best and where foot traffic is heaviest.

For retailers, AI isn’t just about solving operational problems—it’s about creating new customer experiences and formats. As Amazon’s Herrington noted, AI may even “spawn new retail formats,” changing the way customers interact with stores altogether.

As AI becomes more integrated into retail, its ability to optimize operations, reduce costs, and improve the customer experience will continue to drive success. Deborah Weinswig, CEO of Coresight Research, stressed the importance of embracing these technologies to remain competitive and avoid store closures in the coming years.