Retailers Turn to AI-Powered Operating Systems, Upending Traditional Levers of Control
Amazon and Walmart are increasingly becoming the operating systems for merchants, using artificial intelligence (AI) to make decisions on what products to stock, sell, and promote. This shift is transforming the retail landscape, creating new levers of control that go beyond traditional share of shoppers, sellers, advertising dollars, and wallet.
Traditionally, retailers relied on four primary levers: share of shoppers, share of sellers, share of advertising dollars, and share of wallet. However, AI is introducing the fifth and sixth levers: share of decision-making and share of intent infrastructure. Amazon's upgraded Seller Assistant, for instance, continuously monitors a merchant's business and recommends or executes actions within seller-defined limits.
Walmart's Scintilla platform is also evolving from retail analytics to 'commerce intelligence,' using first-party data and AI to identify performance changes and opportunities, connecting those insights to actions such as replenishing inventory or launching Walmart Connect campaigns. The mega-retailer has announced a new feature called 'Shop to Light' where customers can use the Walmart app to ask for help finding an item.
The retail platform is becoming the intelligence layer surrounding a transaction. If merchants begin operating their businesses through retailer-owned intelligence layers, who captures the software spend that previously went elsewhere? Amazon and Walmart don't necessarily need to replace ERP providers or commerce platforms, but become the interface through which merchants decide what those systems should do.