Amazon's Secret Weapon To Winning In Retail, According To Jim Cramer

Many retailers are good at knowing what their clients want, but few are good at knowing what the consumer is going to want, at least according to CNBC's Jim Cramer.

Cramer explained during Thursday's "Squawk on the Street" segment that Amazon.com, Inc. AMZN's use of artificial intelligence puts it ahead of retailers in predicting trends. The company leverages the search data from its tens of millions of users.

Cramer's comments were made in direct response to J. Crew's Mickey Drexler, who acknowledged he was shocked at how quickly technology would change the retail sector.

Not Too Late To Change

But it isn't too late for retailers to change their approach to selling. Cramer noted that Williams-Sonoma, Inc. WSM is working on virtual reality technologies to incorporate how it products will look in a consumer's house.

Another example of a retailer embracing much needed change is privately-held Zara. Cramer noted that he has a representative at the store who personally calls him to entice him and his family to come to stores to see a new product.

Cramer emphasized that Zara's personalized service and constant changing inventory means it's better equipped to predict what the consumer wants "three weeks from now" and knows what consumers won't want "six weeks from now."

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