Will customers let Walmart deliver in-fridge?

Discussion
Photo: Walmart
Sep 27, 2017
Matthew Stern

When we talk about the last mile of delivery, we generally think of getting product to a customer’s front door. But with a new smart home grocery delivery pilot, Walmart is getting down to the last few inches, delivering groceries directly into customers’ refrigerators.

Walmart has partnered with smart lock startup August Home to facilitate in-fridge deliveries in Silicon Valley test homes, according to reports. Delivery drivers are given a one-time passcode, which allows them to access the home (after the driver rings the doorbell once and receives no answer). The driver then unloads the groceries into the refrigerator and leaves. Customers can choose to watch the interaction via app through an IoT surveillance camera.

If integrated with other smart home solutions, Walmart’s in-fridge delivery could add a new layer to the auto-replenishment ecosystem. For instance, if a wired refrigerator were to be capable of communicating it was low on a particular product, it could place an automatic order and have food delivered directly to the refrigerator without any customer interaction required.

The pilot bears some resemblance to a logistics concept Amazon.com reportedly began piloting a few months ago. Amazon partnered with a smart lock company to give e-commerce customers the option to allow delivery people to let themselves into a home to drop off packages.

Walmart has made many big investments in innovation in a short period of time in what is presumably an attempt to go toe-to-toe with Amazon. The company acquired e-tailer Jet.com and popular indie brands like ModCloth, Bonobos and Moosejaw. It has also implemented virtual reality solutions for some aspects of employee training and has even rolled out a Silicon Valley tech incubator called Store No. 8. These modernizing moves have begun to paint quite a different image of Walmart from its reputation as a spartan, low-priced big box retailer.

Another recent delivery pilot by Walmart was distinctly less tech-forward. Earlier this year at one store in Arkansas and two in New Jersey, Walmart began piloting a program in which store associates dropped off online orders on their way home from work. 

DISCUSSION QUESTIONS: Will in-fridge delivery catch on with consumers and will the processes in place effectively mitigate security concerns? Is this service a good addition for Walmart as it works to compete with Amazon and other omnichannel innovators?

Braintrust
"This could be a very specific market opportunity, but I see wider success across more markets when Amazon/Whole Foods gives it a go."
"As an avid user of grocery delivery, I am completely behind it!"
"I think the retail world has gone completely mad."

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32 Comments on "Will customers let Walmart deliver in-fridge?"

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Keith Anderson
BrainTrust

It may not catch on overnight, but it has potential. Attended delivery is one of the biggest barriers to online grocery adoption. Other solutions, like dry ice-packed totes, can only keep food fresh for so long — and some households have concerns about leaving groceries on their doorstep.

The security concerns are valid but can likely also be overcome. Presumably, households that will pay for the convenience of online grocery and have smart locks installed may also have additional home security equipment. And there’s a lot that a retailer can do too, from carefully screening employees to monitoring their location. Countless other domestic services, from home cleaning and handyman work to child care, have already tackled many of these.

Ken Lonyai
BrainTrust

Clearly, a tip of the hat to Amazon’s pilot in a keeping up with the Joneses move. I find it silly and of limited scale for all the liability reasons, but some people might enjoy the service. I think both companies are giving the concept a try to see if there’s any traction while milking the “innovation” PR.

Given that Lore came from Amazon and they were out front with this basic concept, there’s a creepy feel to it too.

Jon Polin
BrainTrust

Does it really matter if consumers go for this? What seems to matter in the heated Walmart-Amazon battle royale is which of these behemoths generates more chatter. Here we are talking about this latest Walmart innovation so score one for Team Walmart!

Charles Dimov
BrainTrust

Brilliant idea that might work for busy Gen Xers and Boomers and this could be a great service for older consumers. The downside is the trust element — which will take time and will be the biggest hurdle to overcome. That — right after the overcrowded fridge syndrome.
I love the innovative ideas that keep coming from Walmart. There is no doubt now that omnichannel retail is here to stay in more ways than originally thought!

Sterling Hawkins
BrainTrust

Trust is a crucial element and I think we can point to other industries where we let people ride in our cars (Uber) stay in our homes (Airbnb) and fuel our vehicles (Purple). It’s really a value exchange in which privacy/security is traded for additional value and it changes over time. It’s definitely worth testing and I give Walmart credit for being willing to try something new, even if it is a takeoff on Amazon’s activity.

Kiri Masters
BrainTrust

As an avid user of grocery delivery, I am completely behind it! Walmart has too much to lose if they were to create a program with security defects, so I personally would trust them to install many checks and balances and ensure a safe customer experience.

Think about it — consumers leave their house keys with cleaning services and dog walkers already. This is not so different.

Zel Bianco
BrainTrust

Maybe I’ve been watching too much Netflix, but no would be my answer. I do not want someone walking into my home no matter how convenient it might be. I’ve got a better idea, why not start building homes with refrigerated units that are opened from the outside where groceries that need to stay cold can be placed? These would be similar to the boxes that some hotels use for room service. Secure and no way to get into the house. Done.

Al McClain
Staff

I agree with you, Zel, but it may be a generational thing. The Walmart nearest me is constantly a mess, inside and out. There is no way I would trust them to deliver the right goods, unlock and lock the door, and not screw something up. Publix, maybe.

Neil Saunders
BrainTrust

This will polarize opinion. Some shoppers will love the convenience of this idea and will trust technology and that will overcome any security issues. However, others will find the thought of having someone enter their unoccupied home, never mind the refrigerator, abhorrent!

What matters most is that Walmart is testing and trying new ways of improving convenience for shoppers. It underlines the seriousness with which the company is tackling the shifts in the market.

Max Goldberg
BrainTrust

This could be a boon or bust for the IoT. All it will take is one robbery for this idea to come crashing down on Walmart.

Phil Masiello
BrainTrust

I think this is going to be a tough sell and has been tried before. Streamline tried this approach in the late ’90s. They actually provided refrigerators and scanners in consumer garages and only accessed that part of the house. I think consumers are wary of having strangers walk through their house when they are not home.

I think Walmart needs to focus. It seems to me that purchasing fragmented e-commerce sites, with no real strategy behind it, is not a path to compete with Amazon.

They need a strategy of category ownership and growth rather than just trying to buy everything and over-paying along the way.

Ben Ball
BrainTrust

The biggest news here is Walmart’s willingness to experiment with projects that challenge conventional retail norms. They have always been prolific experimenters, though most consumers haven’t seen them as such. Initiatives like these work to change consumers’ perception overall. It is the retail equivalent of “unearned media.”

In-home delivery (along with direct-to-your-car delivery and others that require consumers to allow one-time access to their property) is viable. But the number of consumers who will become comfortable with that degree of intrusion on their personal space is going to be very limited. Most of us just aren’t wired that way — yet.

Min-Jee Hwang
BrainTrust

I agree that Walmart is going out on a limb here and that’s a wonderful thing. Walmart has been experimenting with a number of technologies that show it is here to compete. Will consumers want someone coming into their home and going into their refrigerator? Only time will tell, but this new and improved Walmart infused with fresh ideas from recent acquisitions is clearly willing to try out new things to find what sticks.

Ryan Mathews
BrainTrust
I’ve been watching the whole “place it in the home” movement since the 1990s when Tim DeMello’s Streamline tried delivering to special refrigerated boxes in people’s garages. I still think that there is some potential for some variation of this approach, but there is a real, scary devil in the details. Security is clearly an issue. In theory one rape, home invasion, murder or even theft could crash a whole delivery model. But that’s not the only security issue. After all, an Uber driver in Kalamazoo, Michigan went on a shooting rampage because he thought his dispatcher was God telling him to kill and lots of folks still use Uber. What happens when a service is — as Streamline was — only available in certain neighborhoods or ZIP codes? What happens if order size is used as a de facto proxy for retail redlining? What happens when you can’t “batch” deliveries in a cost-effective manner and so you just end up cost shifting the last mile bill? And most critically for Walmart, what happens to brand perception if your core customer base is suddenly — for one reason or another — bypassed by your latest offering? These aren’t easy questions… Read more »
Chris Petersen, PhD.
BrainTrust

In the race against Amazon you have to be willing to fail rapidly. This pilot might fall into that category. But kudos to Walmart for stretching the envelope and letting consumers decide.

This rendition of delivery inside someone’s home seems fraught with security issues. And who wants someone to see the inside of their refrigerator?

Decades ago, the milkman used to deliver to a cooler on my doorstep. Today with IoT and subscription services we are entering a whole new age of automated delivery through Dash, Alexa and even your smart refrigerator. Maybe we need to bring back that milkman cooler … or better yet build houses and apartments with “lockers” and coolers that have delivery doors accessible from outside the home.

Anne Howe
BrainTrust

In-fridge delivery requires a new mindset from consumers. I can see why testing in Silicon Valley makes sense, but mainstream America is quite different. This could be a very specific market opportunity, but I see wider success across more markets when Amazon/Whole Foods gives it a go.

Bob Amster
BrainTrust

Ice box? Pandora’s Box? There are liability concerns and associated insurance expenses, there is customer convenience, there is letting strangers (not your trusted janitor) into your house when you are not there. Not sure about this one.

Shep Hyken
BrainTrust

Whether customers want in-home and in-fridge delivery isn’t as important as the statement that Walmart is making. They are taking Amazon on — head on — and proving they can innovate with a focus on their customers and their convenience. Sure there will be security concerns. Walmart will have to do their best to prove this is a safe and viable service. (Note: Every time we have the cable guy, a plumber or electrician in our house, there are similar concerns. Not much different.)

Al McClain
Staff

I think the difference, Shep, is that we are home when the plumber, electrician, or cable guy enters our house. If we choose to let a handyman or cleaning service in when we are not present, it’s usually people we know. With the Walmart service, it may well be a different, unknown person each time.

Adrian Weidmann
BrainTrust

Having unknown delivery folks enter your home to deliver groceries seems like one very bad experience away from national news and attention. Perhaps we’ll go back to the old “milk chute” where dairy products were delivered by the milkman through a passage built into the house. I grew up in an old farmhouse that had a milk chute. Maybe refrigerators will become “smart lockers” not unlike community mailboxes. As Aldous Huxley showed us back in 1931 — it’s a brave new world!

Steve Montgomery
BrainTrust

With all the proper technology this can be a situation of “trust but verify.” It does require the home owner to invest in a smart door lock at a minimum. Coupled with smart cameras the customers could be notified not only that the door had been opened but view the delivery process.

I expect the market for this will be more of a niche market, but with more and more people seeking secure home deliveries from various retailers, if it is a system that can be utilized across retailers it may achieve a decent market share.

Seth Nagle
BrainTrust

I don’t see this working due to privacy concerns but I think Walmart needs to give it a try to say to their customers, “We offer/tried this service, we’re ahead of the innovation curve.”

The big difference with having these local companies coming into your house and Walmart is there is a local presence so if there is an issue you have a cell phone you can call right away. However, with Walmart I’m not sure if there will be that local presence, and if their customer service is ready for the possible concerns of their shoppers.

Lee Peterson
BrainTrust

Door step, yes. Kitchen, no way. The vast majority of consumers would agree on that one, I’m sure. A good check would be to ask Postmates consumers if they’d let the delivery person in their house all the way to the kitchen. I’m one and, again, no way.

Home delivery is a great test though, that’s for sure. An awesome anti-Amazon feature if pulled off right. The operational piece would be the solution, but to find out is to find out. Fail fast, then fix or bail.

Ian Percy
BrainTrust

I think the retail world has gone completely mad.

Camille P. Schuster, PhD.
BrainTrust

On the one hand, there are consumers who would love to have this service and use it. On the other hand, the security and safety issues will keep consumers from using the service. Is the first group large enough to make the service successful and profitable? The idea has potential. Will it work? Maybe.

John Karolefski
BrainTrust

I would not want a delivery person in my home without supervision. This scheme might work well for dual income households that don’t have the time to grocery shop, but have the extra income to invest in smart locks and in-house cameras to monitor the delivery person.

But if the family is indeed so busy, why stop with stocking the fridge? Have the delivery person make dinner so it’s ready when the family comes home. Maybe the delivery person can clean up and wash the dishes because the family is so tired from working so much during the day.

Of course, I’m kidding. Maybe.

Lee Kent
BrainTrust

Yes, this is fun to talk about but as a mass movement? I think not. Until we have such smart homes that no theft could possibly happen while a stranger is in your house unattended. And to Kiri’s point about house cleaners and dog walkers — if they are not people we have vetted so much they are almost family then they are bonded to the teeth. Maybe some day but for today, it’s just fun to talk and think about. For my 2 cents.

Ed Rosenbaum
BrainTrust

The bigger question to me is am I willing to allow a stranger in my house when no one else is there? How willing will Walmart be to defend the potential lawsuits or even the many potential accusations of theft or damage? It has potential; but negative word of mouth can be a killer.

Ken Morris
BrainTrust

With lifestyles that seem to get busier every year/day, consumers value convenience almost more than anything. While in-fridge might not be accepted by everyone, most consumers will appreciate this extremely convenient service. Imagine never having to take a trip to the grocery store!

Past home delivery services in the late ’90s and early in the new millennium faltered in many cases because of frozen food and refrigeration needs coupled with the lack of smart traffic GPS. Today’s Amazon solution eliminates those barriers to success.

The battle between Walmart and Amazon continues to sizzle. What’s next?

Jackie Breen
BrainTrust

Walmart is taking convenience to the next level. What a great concept both for busy individuals or the elderly who simply need a little help. This idea has a lot of potential, however, as many have mentioned, the trust issue could be a big hurdle to overcome. But once a consumer starts using this service and gets to know their local delivery person, retention rate should be high.

Craig Sundstrom
Guest

I’m having trouble seeing (enough) people allowing this — and we haven’t even had a few over-publicized incidents yet — and/or even wanting it. But other than that, Mrs. Lincoln….

Doug Garnett
BrainTrust

This is an interesting service for a niche of consumers. And that may make it important for Walmart to follow up on. But I can’t see it growing into a major revenue/profit opportunity.

This same problem haunts many of the shiny new baubles of retail. There are all kinds of small clever things that can be done — but very, very, very few scale to be significant.

Worse, investors seem far too easily swung by these kinds of stories and unable to focus on what’s important (but perhaps not too sexy). The downside? Retailers get immediate positive feedback for putting big effort into creating small returns.

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Braintrust
"This could be a very specific market opportunity, but I see wider success across more markets when Amazon/Whole Foods gives it a go."
"As an avid user of grocery delivery, I am completely behind it!"
"I think the retail world has gone completely mad."

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