The Physical Store Is Not Dying. It Is Becoming the Backbone of AI Shopping

Three of America's largest retailers reported second quarter earnings last week. All three disclosed AI deployments. Taken together, the three earnings calls suggest that AI's retail value depends less on replacing stores than on connecting digital experiences to local inventory, fulfillment, and in-store execution. Home Depot disclosed that they have expanded Magic Apron beyond its existing digital experience and into store aisles, where customers and associates can use it to locate products and ask project-related questions in real time. According to the company, the updated version knows which specific store it is operating in and tailors its inventory and product answers to that location, not the general catalog, but what is actually on those shelves. "The nature of your questions and the nature of the help that we can give you is better if we understand, hey, you're in this store," said Jordan Broggi, EVP Customer Experience and President Online at Home Depot. Magic Apron is now receiving millions of questions per month, with Home Depot's app identified as its highest growth digital surface in Q2. Walmart and the Cross-Channel Memory Walmart's Sparky disclosure described a different version of the same physical-digital integration. The AI shopping assistant recognizes ingredients a customer has recently purchased both online and in-store, and excludes them from new cart recommendations, building around what the customer already owns rather than starting from a blank slate. CEO John Furner shared the capability through a specific customer example on the earnings call: a shopper asking for a weekly high-protein meal plan received recipes and meal kits with one-click cart building, with recently purchased items automatically removed. That cross-channel purchase memory explains the 40% higher order value among Sparky users, up from 35% in Q1 FY2027, with the order value gap widening quarter over quarter. An internal Walmart survey conducted in August found that 81% of customers used Sparky to check product availability or review product specifications before purchasing, confirming that Sparky users are intent-driven shoppers further along in the purchase journey. Walmart said approximately 65% of its total eCommerce units were delivered the same day or next day, while its stores served as the last-mile fulfillment nodes for 80% of eCommerce orders, with 3,100 of its approximately 4,600 US stores now served with some level of automated freight. "The number of customers using Sparky is up 70% from last year, and the customers and members who use Sparky for shopping spend 40% more per order than others who don't," Furner said. "It's building trust." Target and the Agentic Commerce Channel Target's physical store integration is playing out at the discovery layer

The Physical Store Is Not Dying. It Is Becoming the Backbone of AI Shopping

Walmart and the Cross-Channel Memory

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