BUSINESS INTELLIGENCE/ANALYTICS

Discount giant steps up cloud and AI initiatives

BY Deena M. Amato-McCoy

Walmart is making a bold move as it continues to seek out ways to distance itself from Amazon.

The discount giant is investing in Nvidia chips. These high-level graphical processing units (GPUs) will be the foundation of a robust cloud network where Walmart data scientists can build out AI systems, reported Geek Wire.

A project championed by Walmart’s OneOps team, which builds and maintains the company’s internal application development system, the neural network will position Walmart to leverage AI going forward. Nvidia GPUs are designed to process large amounts of data quickly. Be-sides supporting cloud services, their processing power support AI appli-cations like natural language processing, image recognition, and overall machine learning, according to Business Insider.

Amazon is already dabbling in this arena, and plans to apply AI further across its newest acquisition, Whole Foods. The natural foods grocer is already swimming in increasing volumes of shopper behavior data. This information will be applied to Amazon’s own cloud-based platform, Amazon Web Services (AWS), which already leverages AI-related services, the Geek Wire report said.

Walmart has been impacted by Amazon’s cloud services first-hand. Historically, Walmart technology partners ran their applications on AWS. That was until the discount giant began warning some tech companies in June that if they want its business, they can’t run applications on Amazon’s cloud platform.

The robust GPUs are only one piece of Walmart’s cloud-based strategy. The discount giant is reportedly also building out its cloud-based data centers and licensing its services to other companies. While the data centers will be one-tenth the size of Amazon’s, Walmart expects the move to give it another way to compete against its online nemesis, Business Insider said.

Target is also making moves to distance itself from Amazon’s cloud-based services. In August, Target announced that it was scaling back its use of AWS.

The discounter plans to “aggressively” move e-commerce activities, mobile development and operations away from AWS through the end of the year and into 2018 — a plan it alluded to back in October. Microsoft Azure is one company hoping to grab Target’s cloud-based operations.

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FINANCE

At Home beats Q2 estimates; raises sales outlook

BY Marianne Wilson

At Home Group is on a roll — and then some.

The fast-growing, value home decor retailer on Tuesday reported its 14th consecutive quarter of same-store sales increases and 13th consecutive quarter of over 20% net sales growth.

In the second quarter ended July 29, At Home's net sales increased 23.2% to $232.1 million, from $188.4 million in the year-ago period. Analysts had expected sales of $227.1 million. Same-store sales rose 7.8%.

Net income totaled $9.5 million, compared to $6.3 million in the second quarter of fiscal 2017. Earnings, adjusted for one-time gains and costs, were 18 cents per share, which just beat estimates.

"Customers continue to respond positively to our trend-relevant assortment of home décor at a compelling value, driving growth in both new and existing stores across a wide range of geographies, price points, everyday and seasonal merchandise," said Lee Bird, chairman and CEO of At Home Group.

Based on its year-to-date performance, At Home raised are raised its 2018 net sales outlook to $916 million to $923 million, up from $906 million to $913 million, driven in part by an annual comparable store sales increase of approximately 3.5%.

"We remain focused on reinvesting in our long-term growth opportunities such as direct sourcing while increasing incentive compensation for our hard-working team members," CFO Judd Nystrom stated. "We are pleased to be reiterating our fiscal 2018 pro forma adjusted EPS outlook of $0.73 to $0.75 despite this reinvestment as well as some third quarter headwinds related to Hurricane Harvey."

At Home opened eight new stores in the quarter and closed one store, which was relocated within its existing market. It ended the quarter with 136 stores in 33 states, which represents an 18.3% increase in stores since July 30, 2016.

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ECOMMERCE

New stores fuel online growth

BY Marianne Wilson

Brick-and-mortar stores are crucial to supporting a retailer's e-commerce growth.

When a new store opens, traffic to the retailer’s website from the surrounding postal area increases by 52% on average within six weeks of opening, according to research from British Land, one of the largest property development and investment companies in the U.K. The study, which used data from Connexity Hitwise, shows that digital traffic from the local area then remains around this demonstrating that a physical store has a significant, positive and sustained impact on digital interaction with the brand.

Brands with fewer than 30 stores enjoyed the greatest positive impact from store openings, with uplifts in local traffic to their websites of 84% on average

"The research shows that physical stores are an engine of online growth," said Charles Maudsley, head of retail, leisure and residential for British Land. "Consumers choose brands that align to their lifestyle and values: A physical store enables a retailer to demonstrate its brand in action and drive interest online. At the same time, stores enable retailers to respond to evolving shopping habits, market their brand effectively, and deliver products more efficiently."

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