Walmart to deliver groceries to temp-controlled smart boxes at customers’ homes


Walmart continues its search to find ways to make home delivery of groceries and other goods more attractive to American consumers. A post by Tom Ward, SVP of customer products for the retailer’s U.S. business, announced a planned pilot of temperature-controlled smart boxes that will be placed outside the homes of customers.
The test, which will take place in the retailer’s home base of Bentonvlle in partnership with HomeValet, makes use of boxes running on Internet of Things technology. The boxes have three temperature-controlled zones for frozen, refrigerated and shelf-stable products.
The technology is designed to free customers from the worry of being available to accept grocery deliveries in time to avoid having their purchases melt or spoil. For Walmart, it opens up the hours that it can make deliveries. “While we don’t have plans to do 24/7 delivery today, it certainly has a nice ring to it,” wrote Mr. Ward.
In an email to RetailWire, a Walmart spokesperson referred to the test as “relatively small,” adding that there will be “no cost to customers” participating. The retailer plans to reach out to its current delivery customers in the market to determine their interest in participating.
The smart box concept being tested by Walmart is reminiscent of the long defunct Streamline.com business, which placed refrigerator/freezers outside the homes of customers for weekly deliveries of groceries.
In a session at NRF 2021, the association’s virtual version of its annual event, Janey Whiteside, chief customer officer at Walmart discussed consumer acceptance of various technologies and services. Those that have become popular, such app-based ride hailing services, did so by gaining the trust of consumers. Walmart has had a similar experience with its InHome delivery offer.
While acknowledging that the retailer is making more deliveries inside of garages than in actual homes as a result of COVID-19 concerns, Ms. Whiteside said that trust builds with delivery customers over time who are then willing to give it greater access. It’s part of the “give and get” equation where Walmart has to prove to customers that there are real benefits to deepening their relationships with the chain.
DISCUSSION QUESTIONS: Do you think the smart box technology that Walmart plans to test or something like it will be accepted by large numbers of American consumers? Will the use of such technology change the economics around home delivery in a significant way?
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29 Comments on "Walmart to deliver groceries to temp-controlled smart boxes at customers’ homes"
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Retail Industry Strategy, Esri
Long term, I absolutely believe that this technology will be adopted by consumers. This is still a test as the article points out. There are still logistical issues to address before this can scale. I think about the cost of the appliances that have to be installed. Who’s paying for those? If it’s the grocer the length of time it will take to make this get positive ROI is years. It also assumes that the customer is only using the boxes with their brand, what happens when you get a box from Walmart and they use it for a competitor or for personal use? I expect that long term consumers will end up paying for the box, and then get incentives from the grocers to use their service in some sort of subscription scheme. We’ll see. I do believe that we will figure this out, the value proposition is too strong to ignore.
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
I suspect ultimately the boxes will be universal with the homeowner controlling what retailers have access to them. That would be the ideal for all merchants.
Principal, Retail Technology Group
Therein lies the key to success. Walmart can lock-in customers and make them a captive audience in the short term. But, eventually, other retailers will want to offer the same service and hardware, and the consumer will want to dictate what retailers or services have access. In a consumer-centric economy, the consumer will continue to have the last word.
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
As it should be.
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
Isn’t that how it should be?
Principal, KIZER & BENDER Speaking
Do you think the boxes will match your home as nicely as the one in the photo? Or will they be the equivalent of an old couch on your porch? LOL
Co-founder, RSR Research
Yes, the color matching is a nice touch. 🙂
Founding Partner, Merchandising Metrics
How can this not work? To say that it makes abundant sense is an understatement. Sure there are lots of details to figure out, but it could be an incredible time saver. The flipside is the ripple effect. Meaning that the trip to the grocery store is often the basis of several other errands. The bank, dry cleaners, hardware store — whatever. And if the shopper still has to make all these other stops, is that a reason to continue to do the grocery shopping themselves? Time savings and convenience will ultimately win the day, but it will be interesting to see how other shopping dynamics are affected.
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
Exactly! “How can this not work?”
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
Principal, SSR Retail LLC
While it’s certainly worth testing, the logistical challenges of finding a spot and providing power will be a barrier for most customers. Never mind how many will disappear from front porches.
Principal, Retail Technology Group
All valid points!
Director, Main Street Markets
Agreed. While I believe that it is definitely worth testing, how would you lock these down so they don’t get stolen? What if they build it like they do mailboxes – stack them in one spot on a street so they are visible and could be monitored?
Consulting Partner, TCS
This is a logical evolution. Isn’t it? Single-family homes are a good target segment for this. Safety concerns will limit adoption, but it is too early to say anyway. After all, Walmart pulled the plug on robotic aisle management after years of testing.
President, Protonik
How many ways can retailers find to pay customers to accept home delivery? The home delivery market simply won’t end up big enough (after the pandemic) to justify all these costs added on top of delivery costs. There’s a train wreck coming — and as usual Amazon’s deep pockets are taunting retailers into mistakes.
Take a deep breath and focus on core business. That’s where true long term strength is to be found.
Co-founder, RSR Research
Am I really the only one that remembers Streamline? This entire process was attempted in 1999 or so. Streamline would put their refrigerators in your garage, as I recall. And (to repeat the mantra), the problem wasn’t the market, it was the same old problem – making money at it.
Streamline has been consigned to the dustbin of history. I hope Walmart can do better.
Principal, KIZER & BENDER Speaking
I also remember a company in the ’90s that would deliver your dry cleaning to a box outside your house.
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
…or in the ’50s a box for milk.
Editor-in-Chief, RetailWire
I loved Streamline and was sorry to see them go. It was nice of them to leave the refrigerator behind.
Retail Tech Marketing Strategist | B2B Expert Storytelling™ Guru | President, VSN Media LLC
Thanks for invoking Streamline in this discussion, Paula. I reported on them extensively back in the day and was told then that its loyal patrons in the Boston suburbs were very sad when the service was discontinued. Some of us miss the milkman too.
Founder | CEO, Female Brain Ai & Prefeye - Preference Science Technologies Inc.
Retail Strategy - UST Global
Eventually this may be a way of locking a consumer in to a delivery partner who supplied the box, but after testing the acceptance of this type of solution someone is going to have to figure out the economics. A non-powered “attractive enough” locking package mail box that Amazon or others can put medium-sized packages into costs north of $100. Who’s going to pay for these?
Strategy & Operations Delivery Leader
The race to mitigate the last mile of grocery home delivery has been on for the past few years. Walmart and Amazon continue to experiment with innovative strategies to make the process more seamless for the consumers and profitable. This Walmart temperature-controlled smart box is a unique way of making the process even more efficient.
However the issue here is who will absorb the additional costs of maintaining and owning the boxes? As the economies of scales ramp up, are the consumers going to absorb ownership and maintenance costs? While this would take a larger step in solidifying the relationship between Walmart and the consumers, there are plenty of questions that need to be resolved.
Professor of Food Marketing, Haub School of Business, Saint Joseph's University
A concept that is way overdue. We have seen the effects of smart appliances. Now we will see technology that reduces the compromise that buyers have had to make to receive home delivery. Good move that I suspect will be copied by competitors.
Founder, CEO, Black Monk Consulting
I knew Tim and the Streamline folks very well, so I’m pretty familiar with why it didn’t work. One of the problems is that when you put temperature controlled boxes in a garage, a scary number of consumers run into them with their cars, lawnmowers, snowblowers, etc., etc. Streamline also hit “last mile” and cost walls, both of which have been mitigated a bit by time.
The real issue is, are garages “trending” (Roughly 40% of American live without garages and/or carports), and what do you do in urban cores where apartments are more prevalent? As to the cost question, that’s a math problem — categories of goods shipped, volume, route consolidation opportunities, etc.
Vice President, Research at IDC
Not sure if this will turn around the industry, but I can still recall that in the 1950s, home delivery of milk permeated over 50% of US households. This dropped to about 30% in the ’60s. It wasn’t out of scope in terms of cost, and more important, scalability allowed dairies to send their milkmen to each household (like mail services and postal services today).
Will it be accepted? Yes, far more than having strangers enter your home and put stuff in your fridge or garage. Inversely, we’ve accepted concepts like garbage and recycling in specific containers, why wouldn’t this kind of solution be exactly the impetus consumers need to accept grocery. Locker distribution will be local to the housing unit, not to some nearby store. Need to watch this space.
President, Global Collaborations, Inc.
Eventually consumers will need strong, heavy, sturdy, expensive boxes that can not easily be carried away. One retailer can not cover that cost. If Walmart’s experiment is successful, then I would expect that there will be a movement for a standard because consumers will not want a whole line of boxes, one for each retailer delivering to them.
Retail Tech Marketing Strategist | B2B Expert Storytelling™ Guru | President, VSN Media LLC
Consultant, Total Wine & More
This technology is an innovative way to address current challenges, but it’s important to make sure the solutions your brand offers continually meet a real customer need. Smart boxes may be a shiny new object now, but as people do eventually return to stores post-pandemic, it will be necessary to balance the demand for this technology and the value it generates against the resources used to produce it.