Walmart Begins to Scale Robotic Local Fulfillment Centers
Walmart will add small robot-staffed warehouses to dozens of its stores to help fill orders for pickup and delivery, the company said on Wednesday, as Americans shift their spending online amid the COVID-19 pandemic.
The robots will work behind the scenes, picking frozen and refrigerated foods as well as smaller general merchandise items from inside the warehouses, or local fulfillment centers, that will carry “thousands of frequently purchased items.”
Store staff, meanwhile, will go to the sales floor to fetch fresh produce, meat, seafood and larger general merchandise items like large-screen TVs, then returning to the centers to finish assembling orders, the company said.
The world’s largest retailer, which operates nearly 5,000 stores nationwide, did not say how many stores will have the new centers but said it was “planning dozens of locations, with many more to come.”
Contactless services like curbside pickup and home delivery have boomed as virus wary shoppers have opted to stay home and make purchases online.
The trend has fueled record digital sales at major retailers such as Target Corp and Best Buy, and Bentonville, Arkansas-based Walmart has been no exception.
In Q1, at the start of the pandemic, pick-up and delivery services at Walmart surged 300%, while the number of new customers jumped four-fold, the company said.
“We don’t see the use of these services changing in the future -- we expect that we’ll continue to serve more and more customers who have come to rely on pickup and delivery,” Tom Ward, SVP of Customer Product for Walmart U.S, told reporters on a conference call.
Walmart began testing similar automated technology in late 2019 at a store in Salem, New Hampshire and found that orders can be filled in “just a few minutes,” Ward said.
The new move comes as Walmart’s chief executive for U.S. e-commerce operations in the United States, Marc Lore, is due to step down at the end of the month.
Under Lore’s watch, the big-box retailer launched same-day delivery and store pick-up services, as well as an Amazon Prime rivaling membership program dubbed “Walmart Plus” to take on the e-commerce giant in its own game.
By Tom Ward, SVP of Customer Product, Walmart U.S. (Jan. 27, 2021 )
It’s clear that one of Walmart’s competitive advantages is our stores. And today, stores are transforming to serve more and more purposes – we’re using them to fill pickup and delivery orders, make Walmart.com deliveries and more. We have a great operation that will serve us well for years to come, but we aren’t stopping there.
Our customers love the speed and convenience of pickup and delivery, and we’re committed to finding faster ways to serve them, which is why we’re scaling the number of stores that will also serve as local fulfillment centers. We’re already planning dozens of locations, with many more to come.
A local fulfillment center (LFC) is a compact, modular warehouse built within, or added to, a store. In addition to fresh and frozen items, LFCs can store thousands of the items we know customers want most, from consumables to electronics.
Instead of an associate walking the store to fulfill an order from our shelves, automated bots retrieve the items from within the fulfillment center. The items are then brought to a picking workstation, where the order can be assembled with speed.
We’ve always said personal shoppers are the secret to our pickup and delivery success, and that remains true. So, while the system retrieves the order for assembly, a personal shopper handpicks fresh items like produce, meat and seafood, and large general merchandise from the sales floor.
Once the order is collected, the system stores it until it’s ready for pickup. This whole process can take just a few minutes from the time the order is placed to the time it’s ready for a customer or delivery driver to collect.
We began piloting our first local fulfillment center in Salem, New Hampshire, in late 2019. The technology is impressive. Equally impressive are the results:
More availability: We are able to pick more orders and do it quicker, creating more availability for customers.
Faster fulfillment: The system’s speed can allow orders to be picked up or delivered within the hour.
Greater efficiency: One local fulfillment center can fulfill orders for many stores, which means its benefits can be felt by customers in stores nearby.
We’ll be building local fulfillment centers with various technology partners, including Alert Innovation, Dematic and Fabric. With these partners, we’ll be testing different orientations and add-on innovations to understand what works best in different environments. For example, in some locations, we’ll be adding on to our stores. In others, the fulfillment centers will sit inside the existing store footprint.
Finally, in some stores, we’ll be adding automated pickup points. Think of it as the ultimate convenience that allows customers and delivery drivers to drive up, scan a code, grab their order and go!
It’s no secret our customers love the speed and convenience of pickup and delivery. These local fulfillment centers help unlock our ability to expand even faster to meet their needs today, while also setting a new foundation to serve them in the future. We’re excited about this new chapter for our business and what it means for our customers.
