Amazon looks to gain a machine learning advantage (AMZN)

Amazon will open an R&D hub in Barcelona in early 2018 that will specialize in machine learning research, VentureBeatreports. Machine learningdrivesmany of Amazon’s capabilities, so investing further in this nascent tech makes a good deal of sense for the e-commerce titan.

Here's how the new hub could benefit Amazon's machine learning efforts across its business:

Amazon may be trying to make machine learning its new competitive advantage. Amazon’s patent on one-click payments is set to expire this year, meaning the company will lose exclusivity on one of its earliest features that drove it to prominence, but machine learning could provide Amazon with a new advantage. In fact, Amazon has filed a number of machine learning- and AI-focused patents recently. If these prove nearly as valuable as one-click has been, they could help Amazon fend off competition from retailers deploying one-click options. Additionally, the company may even be angling for a new revenue stream, as it has discussed making its machine learning and AI available to other companies through Amazon Web Services (AWS).

One of retailers' top priorities is to figure out how to gain an edge over Amazon. To do this, many retailers are attempting to differentiate themselves by creating highly curated experiences

These personalized online experiences are powered by artificial intelligence (AI). This is the technology that enables e-commerce websites to recommend products uniquely suited to shoppers, and enables people to search for products using conversational language, or just images, as though they were interacting with a person.

Using AI to personalize the customer journey could be a huge value-add to retailers. Retailers that have implemented personalization strategies see sales gains of 6-10%, a rate two to three times faster than other retailers, according to a report by Boston Consulting Group (BCG). It could also boost profitability rates 59% in the wholesale and retail industries by 2035, according to Accenture.

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