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

Discussion
Sources: Walmart
Jan 13, 2021
George Anderson

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?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Sure there are lots of details to figure out, but it could be an incredible time saver."
"How many ways can retailers find to pay customers to accept home delivery?"
"This is a logical evolution. Isn’t it? Single-family homes are a good target segment for this."

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28 Comments on "Walmart to deliver groceries to temp-controlled smart boxes at customers’ homes"


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Gary Sankary
BrainTrust

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.

Gene Detroyer
BrainTrust

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.

Bob Amster
BrainTrust

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.

Gene Detroyer
BrainTrust

As it should be.

Gene Detroyer
BrainTrust

Isn’t that how it should be?

Georganne Bender
BrainTrust

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

Paula Rosenblum
BrainTrust

Yes, the color matching is a nice touch. 🙂

Jeff Sward
BrainTrust

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.

Gene Detroyer
BrainTrust

Exactly! “How can this not work?”

Gene Detroyer
BrainTrust
Convenience, convenience, convenience! I live in an apartment with a doorman, so the issues that people who live in houses deal with do not affect me. But the question is, how reluctant are people who live in houses to accept deliveries when they are not present? This is a set to solve part of the problem. It is likely the first step for Walmart that will lead to secure drop off of all Walmart orders. This discussion is not dissimilar from one this group had several months ago about the Amazon Room. If one defines the problem as people being reluctant in any way to order online because they feel they must be home to receive the order, these solutions solve the problem. If you solve this challenge, does it mean that less people go to the store and more shop comfortably online? Yes. But the objective is not to get people to the store, the objective is to sell more merchandise. In five to 10 years every home will have some type of universal… Read more »
Jeff Weidauer
BrainTrust

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.

Bob Amster
BrainTrust

All valid points!

Richard Hernandez
BrainTrust

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?

Suresh Chaganti
BrainTrust

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.

Doug Garnett
BrainTrust

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.

Paula Rosenblum
BrainTrust

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.

Georganne Bender
BrainTrust

I also remember a company in the ’90s that would deliver your dry cleaning to a box outside your house.

Gene Detroyer
BrainTrust

…or in the ’50s a box for milk.

George Anderson
Staff

I loved Streamline and was sorry to see them go. It was nice of them to leave the refrigerator behind.

James Tenser
BrainTrust

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.

Cynthia Holcomb
BrainTrust
Smart box technology on its face sounds smart! How big will a smart box be when it is comprised of three separate temperature-controlled compartments? Will the smart box resemble a refrigerator type appliance on the front porch? With possible 24/7 delivery, how will drones be able to access a smart box? Will smart box delivery drivers keep people awake at night, opening and shutting smart boxes, loading in groceries, and then starting up their truck again to go to the next home? Recently approved FFA laws gave the go-ahead to drones to deliver packages to homes. The human environmental impact of all this traffic and noise in neighborhoods especially at night, versus the trade-off of visiting a retail store for food is a really important consideration to protect livability for everyone. Especially important in densely populated multi-family neighborhoods where townhomes and apartments are all stacked on top of one another. Convenience at scale has a cost, a human cost yet uncalculated by those who seek to monetize new forms of convenience. A cost consumers have… Read more »
Peter Charness
BrainTrust

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?

Brandon Rael
BrainTrust

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.

Richard J. George, Ph.D.
BrainTrust

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.

Ryan Mathews
BrainTrust

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.

Ananda Chakravarty
BrainTrust

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.

Camille P. Schuster, PhD.
BrainTrust

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.

James Tenser
BrainTrust
The connected “milk box” and temperature controlled deliveries are not exactly a brand new idea. (See others here who remember Streamline fondly.) Walmart’s pilot with HomeValet is a fact-finding mission, it seems to me. It will likely come down to specifications and execution. How big does the box need to be? Where do we put it? Does the homeowner control who accesses or Walmart only? I’ve got more: Who is responsible for digging it out of the snow? Can the customer use it to send out returns? Will its appearance be compatible with home décor? For new-built homes, I’d probably favor a “delivery airlock” setup instead — with an exterior door that can be opened digitally by delivery people and an internal door that can be opened from the pantry, garage or laundry room. A key advantage would be the ability to accept larger items, even dry-cleaning on hangars. Temperature control is a good option, but may not be crucial. Walmart’s smart delivery boxes could be a good solution f