Is AI a threat to retail?

January 24, 2024
What will it take to bring AI to physical retail?

The landscape of commerce is changing every year, but growth is not evenly distributed. Ecommerce has been growing faster than retail for many years already and is expected to continue to outpace retail for many more years to come.

The recent advances in AI are almost certainly going to exacerbate this divide, as AI workflows are much easier to integrate for ecommerce than for retail.

AI Benefits ecommerce more than retail

Artificial intelligences reason about their tasks on a foundation of digital information, and ecommerce is entirely digital, whereas retail happens offline, in the real world, where the environment is dynamic and not digitally accessible.

Simply put, AI has an easy time understanding the ecommerce environment and how to be helpful there — but it is incapable of joining retail frontline workers in the domain where retail happens: the real world.

If AI is about to produce the cheapest and most competent labor in history, but that labor is not accessible to retail, then it's only a matter of a few years before ecommerce eclipses retail.

Spatial computing will bridge the digital and physical

The problem is that digital devices don’t have an inherent understanding of the physical world and their place in it. Spatial computing is the art of teaching machines how to understand and navigate its physical surroundings.

Apple presents the Apple Vision Pro as a spatial computer rather than an XR headset. They place the emphasis on “spatial” rather than “headset” to highlight the most important paradigm shift. The change is not from handheld to headset (although that is also happening), but rather something a lot more profound:

Computers are being invited into our physical spaces rather than being used as a gateway for humans to access digital spaces.

Retail is a spatial business, and so it will need spatial AI running on spatial computers. Without spatial computing, the benefits of AI accrue disproportionately to ecommerce forever.

The challenge and opportunity

Retailers spend billions on staff training every year due to high staff turnover (often in excess of 40% per year) and dynamic, complex environments. A quick back-of-the-napkin calculation shows that Walmart alone spends something like 100 million USD per year on first-day salaries.

Spatial AI provides an opportunity for retailers to reduce this training cost, as well as the operational efficiency of their staff. Imagine a world where even first-day staffers know what to do and where to do it.

Take BOPIS (buy online, pick up in-store) as an example. Since typical grocery retail margins hover around 1–3%, every minute spent fulfilling an order is a significant dent on the margin of that basket.

AI/ML-assisted spatial products like Search by Auki Labs cut down the time spent on each order and on other tasks in the store, and Notes allows for smoother and faster communication.

Our hypothesis is simple: Physical businesses need spatial AI, and that requires spatial computing. The Convergent spatial computing platform lets us arm retailers with the very latest technology so they can square up against ecommerce in the age of AI.

Nils Pihl | CEO, Auki Labs (Originally published on

About Auki Labs

Auki Labs is at the forefront of spatial computing, pioneering the convergence of the digital and physical to give people and their devices a shared understanding of space for seamless collaboration.

With a focus on user-centric design and privacy, Auki Labs empowers industries and individuals to embrace the transformative potential of spatial computing, enhancing productivity, engagement, and human connection.

Auki Labs is building the posemesh, a decentralized spatial computing protocol for AR, the metaverse, and smart cities.

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About The Posemesh Foundation

The posemesh is an open-source protocol that powers a decentralized, blockchain-based spatial computing network.

The posemesh is designed for a future where spatial computing is both collaborative and privacy-preserving. It limits the surveillance capabilities of any organization and encourages sovereign ownership of private space maps.

The decentralization also offers a competitive advantage, especially in shared AR sessions where low latency is crucial. The posemesh is the next step in the decentralization movement, responding to the growing power of big tech.

The Posemesh Foundation has tasked Auki Labs with developing the software infrastructure of the posemesh.

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