Has Walmart found a digital answer for empty store shelves?

Discussion
Photo: Walmart
Mar 09, 2017
George Anderson

There’s a lot going on at Walmart these days as the retailing giant continues its aggressive push to create a seamless shopping environment between its stores and online businesses. One example was revealed yesterday by Walmart CFO Brett Briggs who told attendees at the Raymond James Investor Conference that the retailer is testing an endless aisle solution in some of its toy departments.

Pilot departments have a touchscreen where consumers can search for products that may be out of stock in that store. They simply find the product and then order it online for delivery to their home.

Mr. Briggs, according to a report on TheStreet site, said the device can also help those who are in a store and have no idea what to buy.

“It asked me some questions: ‘Do you want a gift?’ ‘Yes, I want a gift.’ ‘Is it for a boy or girl, or it could be either.’ ‘Choose either.’ ‘Pick the age you want.’ It chooses the best sellers for that age,” he said.

Walmart is using technology in a variety of ways to make the shopping experience more convenient for its customers. The company recently announced two new features on its mobile app that enable customers to place orders at the chain’s pharmacy and money service locations in advance so they can skip lines in stores.

“These capabilities are the latest example of how we’re bringing together all of the conveniences of Walmart — great stores, convenient pickup, easy checkout and a top-notch app — to deliver one seamless shopping experience for customers,” said Daniel Eckert, senior vice president, Walmart Services. “We’re delivering a new and better experience in areas of our business that are essential for busy families. By making them faster and easier, we’re living up to our promise — to save customers money and time.”

Walmart is also expanding its grocery pickup program, adding the service to up to 600 locations this year. Last year, CEO Doug McMillon credited the “growth of pick-up in stores and clubs” with helping to drive e-commerce revenues.

DISCUSSION QUESTIONS: Do you see endless aisle technology as a viable answer to the out-of-stock question at Walmart? What other technology being used or tested by Walmart do you think has the greatest potential to help it grow its business going forward?

Braintrust
"I don’t think it’s a completely useful solution to the out-of-stock situation. Delivery later isn’t very convenient unless it fits the category."
"...how long is the delivery time? If you’re talking same-day delivery then I can see this being a very successful (and expensive) initiative."
"I like the idea of an interactive tool that helps me to shop and sends me my order, but I don’t see it as a solution to out-of-stocks. "

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24 Comments on "Has Walmart found a digital answer for empty store shelves?"

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Max Goldberg
BrainTrust

Walmart management is taking all of the right steps to bring their stores into the digital/seamless age. It’s good to see them testing a variety of concepts. If one works, roll it out. If not, delete it and move on to the next concept test.

Sterling Hawkins
BrainTrust

Iterating through new concepts is the best way to effectively innovate. I don’t think this initiative is a catch-all for the OOS problem (that’s still a problem that needs to be addressed), but as you say it’s definitely a step in the right direction and probably a welcome new service for customers.

Jon Polin
BrainTrust

I like the idea of an interactive tool that helps me to shop and sends me my order, but I don’t see it as a solution to out-of-stocks. Once I’m in the store and I want the immediacy of walking out with my products, ordering online and having to wait a few days for delivery is perhaps a slight softening of a bad experience, but it’s no cure.

Charles Dimov
BrainTrust

Yes. Walmart already has price check stations, so this is a great extension. We have all experienced being at Walmart, finding a shelf un-stocked and being frustrated that you just cannot find an associate to help.

Putting kiosks in-store for recommendations and for ordering in un-stocked goods would definitely help the mostly DIY experience. Good move for Walmart in their omnichannel journey.

Adrian Weidmann
BrainTrust

I’m not convinced that asking shoppers who are already in your store to order products through a website kiosk terminal brings value to you brand experience. Particularly as a response to an out-of-stock item. Accurate in-store at-shelf inventory visibility is imperative to enhance the shopper’s journey. Inventory visibility will drive optimized efficiency, localization profits and most importantly provide a friction-less shopping journey. Nothing is more annoying that discovering that the product you would like is out-of-stock. One too many of these experiences will continue to drive shoppers to simply buy online from their homes, further eroding the relevancy of the brick-and-mortar store. In short — address the inventory problem rather than ask the shopper to use a kiosk as an excuse.

Al McClain
Staff

I hate to disagree with you Adrian, but I see this as a positive in the former of providing endless aisle inventory. Even the largest Walmart store can’t carry everything. So, Walmart first tries to satisfy the customer in the physical store, but if it can’t it gets one more shot before they leave. And, if the kiosk option can get the product to the consumer in two days, it’s as good as Amazon Prime and perhaps the shopper had a little fun with the kiosk as well.

Jasmine Glasheen
Guest
Jasmine Glasheen
7 months 9 days ago

Endless aisle technology sounds great, but how long is the delivery time? If you’re talking same-day delivery then I can see this being a very successful (and expensive) initiative. If there’s a week lag time in deliveries, endless aisle is more likely to frustrate in-store customers who come in looking for an immediate purchase.

Ken Lonyai
BrainTrust
I’ll be the flack magnet today on the endless aisle kiosks topic … Endless aisle kiosks are great in theory and have their place, but they fall somewhere between a Band-Aid and a Hail Mary pass. Some people will use them and find benefit, but most shoppers don’t. Making them justify their expense is difficult and the net gains are typically modest or negative. I have been designing advanced kiosk software since 1999. Users do not go shopping in-store to replicate what they can do at home. Endless aisle is a fallback for out-of-stocks (which need better solutions) and the opportunity to offer expanded product choices and some selection guidance, for the minority of shoppers that have the patience to browse that way. It’s cumbersome to really shop standing at a kiosk, exacerbated by having to wrangle children while doing so or with other shoppers breathing over your shoulder waiting for a turn. Then there’s the argument that they serve shoppers without Internet access which fails to recognize that more than 76 percent of U.S. adults have smartphones and those who don’t have a smartphone or PC probably can’t/won’t purchase through a touch screen in-store. Macy’s (Intel-backed) endless aisle kiosks… Read more »
James Tenser
BrainTrust

Some astute comments here, Ken. I’m in firm agreement that an in-store endless aisle appliance is not a solution for inventory inaccuracy problems. It has some potential, however, as a merchandising tool for high-consideration items not normally stocked in the physical retail environment because they are unlikely to turn fast enough. As you observe, however, that experience is easily delivered on a PC or mobile screen without the need to come into the store.

For the rare store shopper who desires exposure to a wider online assortment, why not skip the appliance in favor of a beacon that interacts with their mobile app? Much less costly to deploy, I’d surmise.

Walmart deserves some kudos for its willingness to experiment with this concept, but if it wants to improve its inventory visibility it should try another tack.

Gib Bassett
BrainTrust

It’s curious that they chose the toy department to use as the pilot. In my experience, shopping for toys is typically around a birthday gift for one of my children’s friends. That being the case, I can’t make the time for delivery since I’m buying the day before the party. I like the idea, but other categories like patio furniture might be better. I also don’t think it’s a completely useful solution to the out-of-stock situation since the reason shoppers most often visit the store is to buy at that point in time. Delivery later isn’t very convenient unless it fits the category.

Lyle Bunn (Ph.D. Hon)
BrainTrust

The endless aisle application of using a display for inventory visibility, product selection and ordering is the biggest no-brainer in retail today. No retailer has the space or money to make their range of offerings available in-store in every location. Endless aisle serves all omnichannel, customer engagement and customer experience goals. Endless aisle is both easy and inexpensive to implement, and the inability to do so indicates that inventory awareness and/or online order processing needs serious attention. Endless aisle provides an excellent associate assistance opportunity for closing the sale, upsell and cross-selling.

Kate Munro
Guest

Endless aisle technology is one of many forms retail technology has taken in recent years. Walmart’s goal is to create a seamless shopping environment for its customers, and this is a good goal. It’s a good test to see how consumers will react and use this tool, especially for larger items that are more conveniently delivered to your home. Investing in new technology has been common within stores on the front end, but has been lacking on the back end. Retailers need to approach the backend process the same way, and bring collaborative and innovative technology back to the design and development process.

David Livingston
Guest
7 months 9 days ago

Forget the technology. Hire people qualified to stock shelves.

Doug Garnett
BrainTrust

Being able to order items not carried or available in the store gives consumers more reasons to be in the store and that’s where the biggest profit comes from. So great idea.

But then the CFO buries the theory with the idea of having the interface ask questions like “are you looking for a gift?” That inane comment just killed it for me. When will retail executives wake up to the failure of those prediction systems? Even Amazon, with 15 years of my purchase history in its database, can’t make a decent book recommendation. Why would five simple question at Walmart be any better? Ugh.

All that said, I fully agree with other comments here that this approach only matters AFTER the store is well staffed and that staff ensures the shelves are well-stocked at all times. This system won’t work if they hope it makes up for poor management at the store level.

Ricardo Belmar
BrainTrust

This is a good idea, but not necessarily to solve out-of-stock problems for shoppers. Walmart is really trying hard to use technology smartly in-store to make their shopping experience better. Endless aisle kiosks are really only going to help show shoppers more products than can be kept on the shelf. It’s more than just solving an out-of-stock for an item on the shelf — it’s for those shoppers who are not finding what they want on the shelf and still want to buy. One important question to ask here — is this providing a better experience than encouraging the shopper to use the Walmart mobile app?

Lee Peterson
BrainTrust

We did a study on which digital tools consumers wanted to see in-store the most and “endless aisle” ranked very high (not as high as buy online pick up in-store though). However, this idea works best for big box stores like Walmart. Because with big box stores, you’re semi-stuck there. Getting to another store would be more of a chore than just having it shipped to your house (free I’m assuming). But it’s hard to imagine seeing that in an apparel store in a mall where anyone could just go next door to look for something comparable. So yeah, works for Wally, but caution for others.

PS: where’s Target on this? Is caution towards speed-to-market an issue in Minneapolis?

Lee Kent
BrainTrust

This is a possible way to save the sale but let’s not call this a way to solve their out-of-stock problem. I would be furious to have made the trip to the store only to find so many things out-of-stock, which is often the case.

And that’s my 2 cents.

Tom Redd
Guest

I am with Max. Walmart is making the right moves and for some departments, the concept will help. When I see an out-of-stock at Walmart I ask about next delivery of the product. They look it up on the handheld and hold 1 or 2 for me. Adding the hold feature to the kiosk would help.

Walmart is still #1 and will use much more in $$ to try new ideas. Pick up for grocery is a must move for the suburbia Walmarts.

Dan Raftery
BrainTrust

Agree with most of the challenging observations posted so far and add a positive one. The endless aisle concept is likely one of the reasons for Best Buy’s turnaround. But they did not use it to cover for out of stocks as much as extending the in-store variety offering. Big difference. So is the sales person usage of the interface. Those elements differentiate the offering from what shoppers can easily do for themselves.

Nir Manor
BrainTrust

Out-of-stock on shelves is one of the hottest subjects in retail, and for a good reason. It has a direct negative influence on revenues and it is a real challenge to fix. An “endless aisle” approach may have its place in some types of stores, and should be tested to see if it has positive ROI and if shoppers actually use it. However, this has no connection to out-of-stock, and it is certainly not a solution to that major revenue eater. There are few technological approaches to improving OOS issues, and Walmart as well as all B&M retailers should use technology to reduce OOS situations.

Additional digital/omnichannel initiatives such as “grocery pickup” and above all, “easy checkout” (I assume easy SELF checkout) are exactly on the spot.

bruce Condit
Guest

The “E” in eCommerce should stand for “evolution,” because if you are not evolving you are dying in today’s retail environment. Being nimble is not easy for a company the size of Walmart. However, they are making major strides to evolve and meet the ever changing demands of today’s consumer. I think they are on the right track. They have an excellent reputation with most of their customers and they definitely have the market share across the nation. I think they are on the right track there too. The test will be whether or not they can identify what will work and roll it out fast enough.

Scott Magids
BrainTrust
7 months 9 days ago

The endless aisle concept is a step in the right direction, but Walmart needs to go a little further. As described, the recommendations are generic and menu-driven, and really will not do much for individual shoppers. The best way for Walmart to capitalize on its endless aisle concept is to combine it with big data, perhaps with individual shopper information from a value card or rewards card, which would allow them to use the endless aisle kiosk as a way to make much more relevant recommendations.

Kai Clarke
BrainTrust

Walmart’s answer to “Alexa” does not have the at-home convenience and does nothing to cover the frustration of going to a store to wait in line (now waiting in line at a kiosk?). This is a solution looking for problem. The problem is thin back up inventory creating too many out-of-stocks. The way to fix this is to order more inventory more often. Simple, direct and easy. Oh yeah, it increases customer satisfaction, too!

Fool Me
Guest
7 months 5 days ago

Why would I want to go to a store (endless aisle) only to find that I have to order it online? It’s a big waste of my time. Walmart just doesn’t get it, but they are trying to position the “caboose” (physical store) somewhere on the train to continue making use of it. They will soon learn that they will be like FedEX and UPS watching the train of DHL trucks whizzing by. (DHL ultimately bailed, but it’s doubtful that Amazon will be another DHL).

wpDiscuz
Braintrust
"I don’t think it’s a completely useful solution to the out-of-stock situation. Delivery later isn’t very convenient unless it fits the category."
"...how long is the delivery time? If you’re talking same-day delivery then I can see this being a very successful (and expensive) initiative."
"I like the idea of an interactive tool that helps me to shop and sends me my order, but I don’t see it as a solution to out-of-stocks. "

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