Walmart turns four stores into e-commerce laboratories as online sales surge
KEY POINTS
Walmart is turning four of its stores into laboratories that test ways to turn the company’s huge physical footprint into a more powerful edge for e-commerce.
At the stores, employees will use digital tools, store design features and different strategies that could speed up restocking shelves and fulfilling online orders.
Employees will test an app that uses artificial intelligence to scan multiple boxes in the back room rather than one at a time as they move them to the store floor. They will use new store signage and handheld devices to cut down the time it takes to pick an online order.
Product and technology teams will be based at the stores to accelerate the pace of prototyping.
Walmart will also try to better sync up its apparel assortment at the test stores.
Even before the pandemic fueled e-commerce growth, the big-box retailer had made moves to align its online and e-commerce strategies — such as merging separate teams of buyers.
Walmart augmented reality app testing new technology
Walmart is turning four of its stores into laboratories that test ways to turn the retailer’s huge physical footprint into a more powerful edge for e-commerce.
The big-box giant said Thursday that it’s designating two stores near its headquarters in Bentonville, Arkansas, and two others that will be announced later. It said the stores and their employees will try out approaches that better blend the brick-and-mortar and digital sides of the business and improve the experience for customers.
Walmart, like other retailers, has seen more of its sales shift online during the coronavirus pandemic. Walmart’s e-commerce sales nearly doubled in the second quarter ended July 31. Yet even before the global health crisis, the company focused on using its numerous stores as an advantage over Amazon and other competitors.
“The percentage of times that employees picking an online order find the item on their first attempt has gone up by 20% in some of our tricky merchandise categories when we added the signage and handheld devices.”
For this new effort, employees will use digital tools, store design features and different strategies that could speed up restocking shelves and fulfilling online orders. They will test an app that uses artificial intelligence to scan multiple boxes in the back room rather than one at a time as they move them to the store floor. They will use new store signage and handheld devices to cut down the time it takes to pick an online order. And product and technology teams will be based at the stores to accelerate the pace of prototyping.
Walmart store testing new technology
Walmart will also try to better sync up its apparel assortment at the test stores. Some apparel is not currently listed online. If the store and the website have the same shirts or sweaters, customers have more ways to get those goods — such as retrieving them through curbside pickup or having them shipped to the home.
The company said it will tinker with the checkout area, too, testing designs, hardware and software that make customers’ purchases faster, easier and more contact-free.
John Crecelius, Walmart’s senior vice president of associate product and next generation stores in the U.S., said in a post on the company’s website that simple changes can pay off. For example, he said, the percentage of times that employees picking an online order find the item on their first attempt has gone up by 20% in some of its tricky merchandise categories when it’s added the signage and handheld devices. The signage was inspired by airport terminals, with a letter and a number.
He said Walmart will announce more ways it will use its stores to drive online growth.
Walmart has more than 4,700 stores in the U.S. More than 90% of Americans live within 10 miles of one of its stores. That can make them convenient hubs for fulfilling online orders for curbside pickup or delivery.
Excerpt from corporate.walmart.com/newsroom:
In This New Era of Retail, We’re Testing New Ways to Operate, and It’s the Customer Who Wins
To increase the speed at which we learn, product and technology teams will be embedded in the stores to prototype, test and iterate solutions in real time, scaling what works and scrapping what doesn’t, creating a true rapid prototype environment.
Some of what we test will be visible to customers and some of it won’t. Regardless, it’s the customer who will benefit. Here are a few examples of what we’re testing.
Omni-assortment – Not everything stocked in stores today can be found online. In our first test store, we’re moving most of the in-store apparel assortment online, and we will continue to identify other hard-to-manage categories that we can work to make available. By doing so, we’ll learn what it takes to make all eligible items in the store truly omni– available for customers online and in the store.
Inventory speed – We recently developed an app that speeds up the time it takes to get items from the backroom to the sales floor. Instead of scanning each box individually, associates just hold up a handheld device, and the app uses augmented reality to highlight the boxes that are ready to go. Product gets on the shelf faster – something we all know is increasingly important.
First-time pick rate – We’re currently testing how we can use a combination of in-store signage and handheld devices to help our associates navigate to the right locations when picking items for an online order. So far, this simple change has reduced the time it takes our associates to find the items. In fact, the percentage of times associates find the item on their first attempt has gone up by 20% in some of the categories that tend to be our hardest to pick. What this means for customers is that their orders get filled faster.
Checkout experience – These stores will continue to build upon a new experimental checkout experience we introduced earlier this year to help transform a transactional experience into a relational one. We will continue to test different hardware and software solutions focused on enhancing, and even re-imagining, a contact-free checkout experience for customers.
