Walmart looks to automate grocery pick-up

Discussion
Image: Walmart
Aug 06, 2018
Tom Ryan

Walmart is piloting a new robotics system that fills customers’ online grocery orders from the backroom of a supercenter.

The Alphabot system, developed especially for Walmart in a partnership with startup Alert Innovation, is being installed at the supercenter in Salem, NH as a part of a renovation. A 20,000-square-foot extension connected to the store houses the new system and will serve as a dedicated grocery pickup point with drive-thru lanes for customers.

Mark Ibbotson, EVP of central operations, Walmart U.S., said in a blog entry, “When completed, automated mobile carts will retrieve ordered items – stored warehouse-style in this new space – then deliver them to our associates at one of four pick stations. Our personal shoppers will then pick, assemble and deliver orders to customers.”

The “vast majority” of grocery products Walmart offers in-store are expected to be fulfilled through this system, though personal shoppers will still handpick produce and other fresh items.

The system appears to deliver speed and efficiencies. About 95 percent of orders will be picked up in less than eight minutes, Walmart told Yahoo Tech.

Mr. Ibbotson noted that pickup associates will spend less time walking store aisles and spend more “ensuring customers are getting the absolute best in fresh produce, meats, etc.”

He added, “With the aid of Alphabot, our associates will have more time to focus on service and selling, the two things they often tell us are the most enjoyable part of the job, while the technology handles the more mundane, repeatable tasks. Although this is a small pilot, we expect big things from it.”

Alphabot is expected to be in operation by the end of the year.

Walmart offers grocery pickup services in 1,800 stores, with plans to expand to 2,000 by the end of this year. Alphabot may also support home grocery delivery. In March, Walmart announced plans to expand grocery delivery service to 100 markets nationally, reaching 40 percent of U.S. households by the end of the year.

The remodeled Salem store will also include Walmart’s Pickup Towers for online orders.

DISCUSSION QUESTIONS: Do you see a system like Alphabot solving many of the challenges around in-store grocery pickup? Would such a system likely do more to support in-store grocery pick-up or online delivery?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"I think it would be great for associates to become 'produce specialists' as this is the weak point I see in delivered groceries. "
"This is a perfect role for robots to create efficiencies and reduce costs—assuming they can generate enough volume..."
"What I like most is that it is not visible to the customer, and the customer still deals with human associates."

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19 Comments on "Walmart looks to automate grocery pick-up"


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Jon Polin
BrainTrust

Systems like Alphabot are the (very near) future of online grocery. Retailers who have been growing their online grocery have been smart to focus more on growth than profitability to date but, now that online grocery demand is proven and growing, it is time to improve the unit economics. Systems like Alphabot are the way to do so. That being said, there is still much to be done to improve the front-end customer experience and a few cool technologies emerging to make the customer ordering process faster and easier.

Paula Rosenblum
BrainTrust

I think anything that takes payroll out of the process and provides adequate service is great. I think it would be great for associates to become “produce specialists” as this is the weak point I see in delivered groceries. So I think it’s a good move!

Ken Lonyai
BrainTrust

What happens to the fresh items that pickers don’t deem good enough for pick-up orders? Dump it in the store for walk-in shoppers to rifle through?

Keith Anderson
BrainTrust

As click and collect or store-picked delivery models scale, the impacts on in-store stock levels and shoppers’ experience can be significant. This model has potential to be considerably more efficient and simultaneously to minimize impacts on in-store shoppers’ experience.

It’s another sign that Walmart (and others) sees significant demand for online grocery on the horizon, and that the conventional wisdom around the limitations of online grocery’s economic viability is changing in light of more automated order picking, packing, staging and delivery.

Chris Petersen, PhD.
BrainTrust

Alphabot demonstrates Walmart’s new DNA and willingness to innovate across many areas. Walmart’s core strength has been stores. This technology directly leverages click and collect and could provide differentiation. Given Amazon’s move to offline stores and increasing emphasis on groceries and consumables, Walmart can not afford to be complacent.

Walmart has been investing and piloting in many online areas. It’s great to see an initiative focused on stores and core customers. In today’s retail, no single thing is the killer app or solution. The whole is greater than the sum of the parts. Alphabot appears to be a critical component of click and collect for Walmart.

Neil Saunders
BrainTrust

This solution is both extensive and expensive. As such, it needs volume to become financially viable. It would be fascinating to see the cost-benefit analysis because my view is that this will not be suitable for every Walmart store. Using this to support home delivery would help improve its return on investment. That noted, it is great to see Walmart testing and trying this type of solution.

Ken Lonyai
BrainTrust
The current supermarket model is well over a half-century old and is beginning to show its shortcomings in a connected “Internet-time” driven society. Change is needed and coming — willingly or not. Alphabot is definitely one solution that will make in-store grocery pickup part of that change, but it will be beyond the reach of most grocery stores/vendors for a very long time. I see it as more of a tactic to thwart or stay in step with Amazon and if they come through, Kroger, else it probably wouldn’t get the investment. On another note: “Mr. Ibbotson noted that pickup associates will spend less time walking store aisles and spend more ‘ensuring customers are getting the absolute best in fresh produce, meats, etc.’” That certainly implies that Walmart is now offering lower-quality fresh products to customers among its assortment. I like tech, but before going down that road, it would be far better and egalitarian for customers if Walmart were to first improve product quality screening and offer everyone the “best in fresh produce, meats,… Read more »
Art Suriano
BrainTrust

I think Alphabot is excellent and I can see the many benefits it will provide. However, what I like most is that it is not visible to the customer, and the customer still deals with human associates. I’m all in favor of technology that provides services as long as it does not attempt to replace interaction with human beings. The contact between the customer and store associate, when done correctly, is the most influential and most successful part of any in-store purchase. When technology attempts to replace that, the retailer is excited about the money they’ll save but doesn’t realize the lost sales they will incur because it is a turnoff to customers. Alphabot has taken what technology can provide and, behind the scenes, it becomes a great tool to help Walmart provide excellent customer service. I see this as being very successful.

Lyle Bunn (Ph.D. Hon)
Guest

This is an important next salvo in the battle of the buggy. We all want to get away from pushing and filling that shopping cart and there are many routes to this. Going after the high volume, high frequency visit with a next generation of food buying experience makes sense for Walmart and its competitors.

Adrian Weidmann
BrainTrust

The point in the Alphabot process that gave me pause was the need for personal shoppers. This will inevitably be the weak link in the entire process. These individuals will need to become customer advocates — making certain that they select fresh produce that they would trust to feed their families as opposed to simply filling the order. Given the nature of robots and the defined processes around their operation, the accuracy of the orders will not be an issue.

Shep Hyken
BrainTrust

This is a system that will help expedite fulfillment — and with the accuracy and efficiency that a sophisticated automation can provide.

Ken Morris
BrainTrust
Ken Morris
Retail industry thought leader
1 year 4 months ago

The labor to pick items from the shelf or stockroom for buy online, pick-up in-store cuts into margins that are already razor thin for grocery. This is a perfect role for robots to create efficiencies and reduce costs — assuming they can generate enough volume to cover the expense of the robots. Leaving produce and meats for sales associates is a smart move, as relying on robots for those products could result in some unhappy customers. The pick and pack function for store pick-up and home delivery is essentially the same, so Walmart will be able to use it for both options which will help them achieve a positive ROI more quickly.

With labor very tight in most markets, robots are a good alternative for processes and tasks that are very repeatable and predictable. Using robots for customer-facing process is still a long way off.

Ricardo Belmar
BrainTrust

From a pure technology standpoint, the Alphabot system is an ideal blending of robotic automation and associate labor. This feels like a very efficient system thanks to the robotics added to the mix. However, it also looks like scale and volume are key to making a positive impact with this system. Walmart may be the only grocery retailer with enough scale and volume to pull this off successfully. It reminds me of the Ocado system we’ve seen, and it continues the theme that to solve the online grocery and in-store pickup scenario for grocery is going to require massive scale and automation to do it profitably. I can see this form of robotics becoming an extension of the core infrastructure for grocers of the (near) future.

Lee Peterson
BrainTrust

For 4 years now, our surveys have been telling us people want to pull up to a store and have goods put in their trunks and then drive off. NOT to go into said store. So IMO, that’s DEF going to be first. But the strategy is excellent to start to deliver to home as well because after a few tastes of that, just like what AMZN did a long time ago, you’re going to be just as hooked. It’s just going to take longer because face it, we’re all rote shoppers at heart. Win Win Walmart — I think that’s my new name for them.

Ananda Chakravarty
BrainTrust
No. Doesn’t solve the problem of in-store grocery pickup. In part, because grocery pickup is more than simply picking and packing. Problems in product availability and supply chain need to be tackled first. Handling refrigerated product and fresh foods will further hamper this picker. Lastly, the costs to install, maintain and manage such an automated system may make it uneconomical even at scale — which is what Walmart is partially trying to find out with this test. Paula makes a great point about specialists and logically as robots take over human jobs, people will move to higher level focus — such as selling and service instead of picking and packing. As for my interpretation of the second question, for increasing customer adoption of pickup, maybe; for online delivery, no. Automation doesn’t add value for perimeter products (higher profit margins, branding, sales value) and the online grocery delivery market remains tiny with linear growth. The large grocers will (in)validate store automation with testing and rollout — but too early to tell. It’s mostly defensive, marketing, and… Read more »
Harley Feldman
BrainTrust

Alphabot, if it works properly, should automate the mundane tasks for the in-store grocery delivery business and free associates to do more personal tasks for the consumer. As with all automated systems, the consumer will benefit with better service. Alphabot will shine is supporting in-store grocery pick-up.

Over the weekend, I picked up an item at a Walmart store that I purchased online. I used the app as I reached the store to notify I was there. When I went to the pick-up area, the associate was walking out from the back with my item — tremendous service. If Walmart can provide the same service with groceries, it will be a winner.

Sterling Hawkins
BrainTrust

The great thing about these smart automation technologies is that they can be leveraged across several functions. Grocery pickup is the first step, but it’s a natural to see this same infrastructure support online delivery fulfillment. Emerging technologies are letting us break down barriers of traditionally separated business silos to increase efficiencies and ultimately vastly improve the customer experience.

Min-Jee Hwang
Guest

Alphabot is an exciting trend in omnichannel grocery, especially for an industry that is so challenging to expanding into eCommerce. The in-store buying experience, and being able to see and feel food before purchase is still preferable to so many. At the very least, Alphabot will allow Walmart to continue to innovate omnichannel grocery and hopefully improve the shopper experience in addition to their own margins. However, it’s always tricky when it comes to food, and their personal shoppers are going to have be diligent in selecting the best produce or risk turning away customers.

Michael La Kier
BrainTrust

Efficiency in e-commerce is essential. The ability to drive down supply chain costs is part of Walmart’s DNA (I just don’t know that Sam Walton envisioned Alphabot as the way to get there). It will be fascinating to see the results and if this takes off.

wpDiscuz
Braintrust
"I think it would be great for associates to become 'produce specialists' as this is the weak point I see in delivered groceries. "
"This is a perfect role for robots to create efficiencies and reduce costs—assuming they can generate enough volume..."
"What I like most is that it is not visible to the customer, and the customer still deals with human associates."

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