AI helps small stores fight retail giants like Amazon and WalMart, and they’ll need the help in today’s digitized marketplace. Tech infrastructure is a huge advantage for big retailers like Amazon and Walmart, while medium and small retailers struggle.

To start with, smaller stores can’t afford large physical inventories the retail giants have, and don’t have the ability to mine data insights to help them strategize. Fortunately, new advancements in AI and machine learning is beginning to change all that. 

AI and machine learning can make the use of tech for small and medium-sized retailers a more level playing field. There are now more AI startups cropping up that can offer scaled-down tech that’s comparable to the AI tools that Amazon and Walmart use.

The new “Data Democracy”

According to Kishore Rajgopal, founder and CEO of NextOrbit — an AI platform for inventory and price management, Amazon and Walmart have been lording it over the retail industry since they “had all the data and the data scientists and you could never catch them [insights] – but now you can.” Due to existing e-commerce tech, many retailers, even smaller ones — already have a large amount of customer and transaction data handy, which they can and have used as basis for future strategies. For smaller retailers, maximizing the data can be tricky since many of them are more familiar with merchandising and not machine learning.

RJ Taylor, CEO of Pattern89, an AI digital marketing platform for social ads, is well aware of the smaller retailers’ dilemma: “They’re coming from a creative and marketing perspective, and they don’t have the data language skills that are required to pull the inference out of that data.” Thankfully, they no longer need to; due to increasing demand, many AI tech companies are offering AI and machine learning-based tech to help small and medium-sized retailers price their offerings competitively, stock them strategically and use data for their benefit.

AI Assistants for Operations

AI platforms have been sprouting up that enable smaller retailers find patterns in their data and come up with actionable recommendations. One such AI platform is Yaguara, an operations management platform. By using Yaguara, employees can be kept on-track to achieve set objectives, whether it be doubling sales or improving customer retention online. NextOrbit is a platform that combines retailers’ sales data with relevant local factors to create a more granular model for product demand. For example, if there’s a blizzard, a local store opening or an Apple promotion happening, these “relevant local factors” are used to help decide how much inventory a retailer should stock each week at each store.

NextOrbit is also capable of optimizing retail pricing, such as when to mark down a product and by how much; such capability helps smaller retailers maximize returns on inventory and makes them competitive with e-commerce juggernauts Amazon and Walmart.

Screenshot of Yaguara AI platform's user interface
Sample screenshot of the Yaguara AI platform. Even small and medium retailers can see relevant features of the business, like sales performances, paid advertising, current projects, objectives and achieved goals, among many others – all at a glance (


Implications for Retailers and Marketers

For small and medium-sized retailers, the arrival of AI startups that can harness data at scale and provide actionable insights for them — much like the “Goliaths” do, is a godsend. As more AI startups are founded, there will be no lack for smaller retailers to use their tech. Meanwhile, entrepreneurs seeking to enter the retail business will be encouraged to start their retail enterprises, knowing that while they may be the Davids of retail, they can have the means to go toe-to-toe with Goliaths like Amazon and Walmart.

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As marketers, what do you think of these AI startups catering to smaller retailers? Do you think their tools can help smaller stores thrive in today’s digital marketplace? Let us know in the comments!

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