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Walmart's Sam's Club has gone all in on AI. Will it help it get a leg up on Costco?

Sam's Club aims to build an AI ecosystem to differentiate itself and give back time to its employees to help customers.

It's all AI, all the time, for Sam's Club.

Execs for the wholesale club unit of Walmart (WMT) told Yahoo Finance that it aims to build an extensive AI ecosystem to differentiate its store experience from its rivals.

One goal: more accurate inventory data. Another goal: give more time to employees to actually help customers as they shop. That's all crucial as the company competes for value conscious consumers with other membership-based retailers like BJ's Wholesale Club (BJ) and Costco (COST).

How? I recently had the chance, with Sam's Club executives, to get an inside look at how AI and technology is being used at a location in Secaucus, New Jersey. Here are some of the innovations:

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Sign up: To get a membership, shoppers start by using an iPad (AAPL) and scan a QR code to add their membership card to the app. That routine once took roughly 20 minutes; it's now down to single digits, said Todd Garner, Sam's VP of retail product management.

Help! Displayed throughout the store, the QR Code, in the picture just below, allows customers to quickly ping an associate on an employee-facing app, called My Club, to come over and help. Garner said response time is "getting pretty fast" and customers can give immediate feedback on the exchange with the Sam's associate.

Scan for help, now featured at Walmart's Club for associates to come help customers. (Brooke DiPalma/Yahoo Finance).
Scan for help, now featured at Walmart's Sam's Club for customers to ask for associate help as oppose to searching around for help. (Brooke DiPalma/Yahoo Finance).

Ask Sam: If customers are curious where an item is, employees can ask an AI digital assistant, "Ask Sam," on their iPhone or Google Android. It rolled out back in 2018 and now features new modifications like Spanish translations. Ashley Hughes, a market manager at Sam's Club in Secaucus told me: "Ask Sam is pretty close to Siri and I think Siri pretty much knows how to do everything."

Robo-shop: Chipotle's "Chippy" has nothing on Sam's store robot. Sam's fans can expect to see a robot roaming around called Scrubbers. Each club has one, for now, and are nicknamed. "Roberta" works the floor at the Secaucus club.

The robot was, in the past, just a robo-janitor. But now each has been retrofitted with an inventory intelligence tower. ("More bang for your buck," Garner added.)

Roberta's work day: it runs once a day between 8-10 AM to clean the floors and tell associates if the aisles are dirty. If an item is out of stock, or getting close to being out of stock, it notifies the app tool MyClub/Own Your Inventory (OYI). In a typical day, Roberta and its robot peers take 22 million pictures and automates 35% of inventory management tasks.

Known as Roberta at Sam's Club Secaucus, scrubbers are now retrofitted with an AI-powered, intelligent towers (seen on left) to track inventory. (Brooke DiPalma/Yahoo Finance)
Known as Roberta at Sam's Club Secaucus, NJ location, scrubbers are now retrofitted with an AI-powered, intelligent towers (seen on left) to track inventory. (Brooke DiPalma/Yahoo Finance)

Fresh sales tool: Another machine learning part of the app creates data forecasts around fresh food production. Pete Rowe, Sam's Club VP of technology, said all the data from the Scrubbers, plus employee insight, is used to predict, and understand inventory levels—particularly food than can quickly spoil.

The associate input is crucial, said Rowe. The machine does not know, at least not now anyway, that there's a local football tailgate that can up the demand for wings and beers. That said, forecasts for items like the ultra-popular rotisserie chicken can be updated hourly thanks to the new tech.

Buy more: "Scan & Go," which has evolved to "Scan & Go Fuel" and "Scan & Go Cafe," allows customers to pay for an entire order on the app, or schedule a mobile pickup at the cafe. The AI model also understands customer shopping preferences. That's why, before paying, you might get a "Did You Forget?" prompt to buy bacon along with the eggs you just picked up.

So far, Scan & Go seems like a hit for Sam's: its usage is up 230% since its inception in 2019.

The bottom line: it's an new world at Sam's, and other retailers, and there's no turning back.

Low-priced goods alone—and a lot of them— are no longer enough as Walmart CFO John David Rainey might tell you. "It's not just around price." he said on Yahoo Finance LIVE. "It's also around convenience and that matters irrespective of what your income level is and so things like online pickup and delivery continue to grow in much faster rates than the rest of our business."

Which is crucial for a company the size of Sam's.

This past quarter, for instance, Sam's produced sales of $20.5 billion, up 4.5%—along with a 6.3% increase in membership income. As of May 9, there are 600 Sam's Club locations in the U.S., per data platform ScrapeHero. That's compared to 589 Costco locations and 247 BJ's Wholesale Clubs.

Meanwhile, year-to-date, shares of Sam's parent company, Walmart, which will host its annual meeting next week, are up 4.2%. (Shares of BJ's are down some 3.8%; Costco, which is set to report Thursday after the bell, are up 6.0%.) The Consumer Staples Select Sector SPDR Fund (XLP)? Down, 0.5%.

How's that Roberta?

Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.

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