Walmart expands test of giant automated grocery kiosk

Discussion
Photo: Walmart
Sep 17, 2018
Tom Ryan

After a test in Oklahoma City last summer, Walmart is opening a second grocery pickup kiosk at a location in Sherman, Texas that enables customer to pick up orders without having to interact with a store associate.

Under the set up:

  • Orders are placed by customers who shop online or through their mobile browser at walmart.com/grocery;
  • Walmart associates inside the store fill the orders;
  • The orders are organized in bins and placed in the massive kiosk located in the parking lot, which is equipped with refrigerators and freezers for perishable goods.
  • Customers pull up to the kiosk building, walk up to an interface station and scan the barcode they received with their “order ready” e-mail. The kiosk retrieves the order, delivering it to the customer in a process that takes a minute or less.

Customers are not charged extra but must spend at least $30 per order to use the service.

“Not only do customers not have to wait for an associate to bring them their order, but they also never need to set foot inside the store,” a Walmart spokesperson told Business Insider.

The Sherman kiosk, measuring 11-by-127-feet, is able to serve five customers at once, larger than the one in Oklahoma City that’s able to service two at a time.

Walmart has been investing heavily over the last year in a variety of pickup and delivery options. At the end of Q2, Walmart U.S. had more than 1,800 grocery pickup locations, more than 320 stores offering grocery delivery, and more than 325 pickup towers, which focus on general merchandise. Grocery delivery is expected to reach 40 percent of the U.S. population by year-end.

“Grocery pickup wait times continue to come down and our grocery delivery times are improving,” said Walmart CEO Doug McMillon. “We’re continuing to innovate with trials of self-driving cars in Arizona for our grocery pickup customers and automated picking capabilities for grocery pickup in our store in Salem, New Hampshire. Overall, our omni-channel initiatives are contributing to comp sales growth and providing customers with new levels of shopping convenience.”

DISCUSSION QUESTIONS: What do you think of the shopper appeal and workability of grocery pickup kiosks? Do you see it complementing or replacing in-store grocery pickup or reducing the need for home delivery?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"This is exactly what I love about Walmart…test, test, test and try, try, try to innovate for the shopper. Never count Walmart out!"
"Complimentary. Customers want choice, and a given consumer may make a different produce collection decision depending on their daily circumstance."
"Speed sounds great. Making it extremely easy to spot is half the battle, so having a standalone kiosk is a good move (albeit expensive). "

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30 Comments on "Walmart expands test of giant automated grocery kiosk"


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Neil Saunders
BrainTrust

I don’t see this reducing the need for home delivery; the rationale for using that service is often very different than in-store pickup. However, I do see this as a sensible option for reducing the time and expenses associated with manning a pickup counter.

All that said, the automated picking and automated home delivery technologies are a lot more of a game changer than this.

Chris Petersen, PhD.
BrainTrust

The need for speed doesn’t always mean winning the last mile. Customers are situational shoppers. For those looking for fast convenient pickup, grocery kiosks could be the answer. The kiosks would be far less costly than the last mile delivery if customers use them. The kiosks certainly leverage Walmart’s strengths of stores and location. The only thing better might be a drive through garage where someone loads your groceries for you … and I’m sure that someone is working on that.

James Tenser
BrainTrust

You have the right idea. Many click & carry grocers in Europe are set up like drive-ins. Shoppers pull into a covered space, pop the trunk and an associate loads the packages. Our local Walmart has a similar thing going — drivers pull up to a side entrance (no awning) and an associate brings out the order.

Walmart’s giant drive-up kiosks are an interesting variation on the theme that anticipates a large volume of pickup orders, I think.

One aspect I’m uncertain about is the method for bringing orders from the store out to the remote structure. Do associates use a hand-truck or a golf cart or simply shopping carts? How is the cold-chain handled in hot weather? What about wet or snowy conditions? I have a feeling that Walmart is still working out the answers to these questions.

Ricardo Belmar
BrainTrust
Walmart continues to experiment to find the right formula for grocery pickup and delivery to maximize convenience for shoppers. It’s interesting that in most of these experiments the goal is to satisfy the customer without asking them to enter the store – something that general buy-online pickup in-store methods are designed to promote. The kiosk strategy provides a strong convenience factor, although I wonder how effective this will be if it turns out to be extremely popular, generating lines at the kiosk similar to what a customer would see inside the store. What will the experience be for the sixth customer that approaches the kiosk? Will they perceive the added wait time as diminishing the overall convenience factor? I’m sure Walmart will be watching this and using the data to optimize the size of future kiosks. I expect many grocery shoppers are like me in that they don’t enjoy the grocery shopping process and are looking for ways to minimize the time spent on it. This could be very appealing to a segment of Walmart… Read more »
Art Suriano
BrainTrust

The grocery pickup kiosk idea is as good as anything. Grocers are determined to find the best way to get groceries to customers without having them come into the store. Delivery is not going to be a big win for grocers long-term because as they solve the problem, store traffic will continue to drop and they’ll be forced to close more stores. However, the bigger concern is that all the delivery ideas are costly, and they impact gross profit, not to mention how grocers lose out of impulse buying. Lastly, as we can see by the numbers, buying groceries online is still not as popular as grocers would think based on their determination to entice customers to use their delivery service. However, what I do like about the Walmart kiosk program is it gets customers into the parking lot. For this reason, some customers will come into the store if there’s something they need and that will help add to more sales.

Dick Seesel
BrainTrust

Keeping in mind that this is only a test, it shows potential. I’m thinking about the subset of online grocery shoppers who may place their orders while at work, and can stop at the self-service kiosk on the way home. For that customer, this concept eliminates the issue of limited time to schedule a home delivery or to stop inside the store.

Clearly taking the capacity from two to five shoppers at a time points toward some initial success (as well as some bugs in the system), so this will be worth watching. It’s another case where Walmart’s huge physical footprint does provide a competitive advantage vs. Amazon.

Bob Phibbs
BrainTrust

I think the great push for no interaction from humans will ultimately bite many retailers on the butt. Maybe the niche who hate human interaction, the one they are all rushing to fill, just isn’t big enough to move the needle like in a store.

Sterling Hawkins
BrainTrust

There’s definitely a balance between people and automation. And it might be different depending on the vertical and customer. I’m 100% with Bob that it’s not about taking humans out of the equation. What’s great about a lot of this technology is that it is automating a lot of the repetitive work that frees humans up to engage in more meaningful things.

Dr. Stephen Needel
BrainTrust

For starters, they would have to redesign this for my area – it violates all kinds of building codes that Walmart agreed to in order to build in some of our suburbs outside Atlanta. I’m curious as to whether shoppers are complaining that pickup takes too long? It takes me a few minutes to walk into my store and get my stuff – at most, I’ve been second in line. And every time someone uses this, Walmart loses an opportunity to get additional purchases.

Shep Hyken
BrainTrust

Once again, the concept of convenience is taking front and center stage. This time it’s with grocery pickup. Walmart CEO Doug McMillon’s focus on grocery pickup is important to making the consumer experience better. His quote in the above article sums it up well: “Grocery pickup wait times continue to come down and our grocery delivery times are improving.” It’s about a better experience – a more convenient experience.

Tom Dougherty
BrainTrust

I doubt it will make much of an impact. The problem is the 600-pound gorilla: Amazon. Specifically, Amazon Fresh which can get you grocery items right to your door. In this case, you still need to DRIVE to pick up your groceries.

I’m not against this tactic. But I don’t see it changing much shopping behavior.

Charles Dimov
BrainTrust

Speed sounds great. Making it extremely easy to spot is half the battle, so having a standalone kiosk is a good move (albeit expensive). I definitely think that Walmart stores will either have this kiosk or will have in-store grocery pickup. I don’t think it will make sense to have both. The kiosk idea puts more control in the hands of the shopper — which should not be underestimated.

However, even as this idea takes off, I have heard that other similar initiatives still encourage more in-store traffic and sales. When people drive into a Walmart parking lot they often think of some other item that they need, which will ultimately drive more sales.
Another good move on Walmart’s part. Keep them coming!

Ricardo Belmar
BrainTrust

Charles, your comments made me think of another point that Walmart may be studying with these test sites. It seems to me if you target a Walmart that is always busy, with long checkout lines, you’ll see the kiosk used more often. For example, my nearest Walmart is just such a beast. Once you enter the store, there is no such thing as a “quick trip” — you’re sure to have five or more people in line at the checkout ahead of you no matter how many checkout lanes Walmart opens. The store is always just that crowded, as is the parking lot. If they were to place one of these kiosks at this location, I wonder how quickly those five spots would fill up!

Phil Masiello
BrainTrust

Not having to park and walk a distance into a store is probably the biggest appeal of these kiosks. The speed of in and out and the convenience of pulling up will probably benefit mothers with young children or elderly customers. These buyers can now pull up to the kiosk, leave the kids in the car while they retrieve the order and be on their way in minutes.

It is a good addition to the other conveniences of home delivery and grocery pickup. Walmart needs to make sure that they are accurate with the orders. All it will take is a few mistakes that cause the customer to go into the store and wait to resolve the problem to cause the customer to lose faith in the process.

Anne Howe
BrainTrust

This is exactly what I love about Walmart…test, test, test and try, try, try to innovate for the shopper. Never count Walmart out!

Peter Charness
BrainTrust

Complimentary. Customers want choice, and a given consumer may make a different produce collection decision depending on their daily circumstance. If this is a “convenience” purchase, for instance, picking up some milk on your way home, the $30 minimum will incentivize additional purchases which is good for the grocer and should be concerning for c-stores.

Chris Buecker
BrainTrust

Walmart is preparing to extend its services to its customers. As Amazon has entered the food market (Amazon Fresh/Whole Foods), this is a logical step. Customers save time to pick up their purchase on their way back home and Walmart saves on the last mile.

Brandon Rael
BrainTrust

From a practical and efficiency perspective, the grocery pickup kiosks make economical sense for Walmart to help mitigate the last mile for grocery pickups. However, the beauty of offering a Buy Online Pickup In-Store (BOPIS) grocery program is the added incentives for grocers to drive the customers to the stores where the impulse shopping opportunities really resonate. Efficiency and non-human interactions have their place, but in the tight-margin grocery business, the incremental business drivers are there when the customers are willing to drive to the store.

Otherwise, the default and a far more efficient option is to drive consumers to the home delivery route.

Joanna Rutter
BrainTrust
28 days 10 hours ago

When you’ve got a thousand parking lots in prime real estate, this does seem to be the thing to do. I especially like the idea of bringing a customer onto Walmart property to complete an interaction without funneling them through the front doors — it’s very efficient in a way that shopping in a sprawling Walmart store often isn’t. I think any grocer that’s going to succeed in pickup and delivery programs must diversify their solutions, both for a better customer experience (grabbing meal prep stuff on a commute vs. needing three ingredients delivered, etc.) and on the operations side for the retailer themselves, to keep learning from their data and not bet all the grocery innovation budget on one kiosk.

Ananda Chakravarty
BrainTrust

The Walmart kiosk is like McDonald’s drive-thru or a coffee run at Dunkin Donuts. It really is for convenience of a certain niche of customers that are looking to get in and out quickly but need their item that day. Customers using this service would be less inclined to impulse-buy, will probably come back to the store for their regular buying, and will seek small basket sizes. A hefty percentage of Americans still buy on their weekend shopping trip, and online grocery shopping for 50-100 items will be slow to take, so this is focused on a narrow group of customers that complements grocery pickup and home delivery. Ricardo summed it nicely in his first sentence – it’s an experiment, and Walmart is looking to see how they can corner this customer segment.

Cynthia Holcomb
BrainTrust

Redbox for groceries. Going to the grocery store involves driving to the grocery store, getting out of one’s car and walking inside the grocery store. During peak hours, after work or weekends, being able to walk to a kiosk (having taken the time to place a digital order) may make sense for some and not for others. If the wait outside the kiosk is a few people deep, like returning a Redbox movie, then people may be more upset than pleased. If the kiosk breaks down like the bottle drop machines, will a human be around to assist? Good for Walmart for experimenting!

Sunny Kumar
BrainTrust

In the U.K. we have had a similar set up, albeit without the giant kiosk. Some supermarkets offer click and collect options that allow customers to order online and then pick up from the car park without entering the store. Goods are usually handed over from a standard supermarket delivery vehicle.

This however has not become a universal offering. U.K. shopping habits have gone through a major shift in the past five years, moving from the big weekly shop to more regular small shopping visits. If the giant kiosk concept could be smaller — able to fit inside a convince shop — then perhaps that could work well in the U.K., as well as convince shoppers in the U.S.

Jeff Sward
Guest

My first thought echoed Dr. Needel’s about the potential for lost business. Am I the only grocery shopper who manages to think (or see or smell) of something additional needed after making the list? Would I run into the store anyway? Just put in on the list for the next trip? Am I the only grocery shopper who actually enjoys picking out my own fresh food? (Point taken on the shopper with young kids in tow.) In the end, TEST away Walmart, and thank you for pioneering new initiatives! Lots of different shoppers with lots of different dynamics at work. Explore + Experiment = Experience for both the customer and retailer alike.

Adrian Weidmann
BrainTrust

Grocery pickup kiosks simply don’t resonate with me. Grocery home delivery — yes. It seems that we’ve given up on human interaction at retail. While reducing payroll will please Wall Street, the longer term results will not be nearly as interesting. People need more human interaction — not less. It’s one thing to order paper towels, canned goods and other staples but I, for one, don’t want someone else selecting my fresh produce, meats and deli items.

Bob Amster
BrainTrust

This concept will have limited appeal and the locations will be highly selective. This is not for every Walmart customer.

Ken Morris
BrainTrust

For shoppers that want the convenience of picking up orders without going into the store, this is a good option. The grocery kiosks are a complement to in-store pick-up and delivery options. Walmart is focused on giving customers many ways to buy, receive and return goods. Consumers love options and they are getting many options at Walmart. Walmart continues to innovate and drive new customer expectations.

With 90 percent of the U.S. population within 10 miles of a Walmart, this is a game changing idea and may just change the way America shops. Even well-to-do customers will buy their basic items this way without having to enter the store.

This is also a great use case for automation. While there is a human element in bringing the groceries to the kiosk, the fulfillment and interaction with the customer is completely automated.

Steve Montgomery
BrainTrust

This in-between approach will certainly appeal to those who don’t want to have to park, enter the store and the interact with a clerk who may or may not be able to quickly locate their order. That being said I don’t see this being a part of Walmart’s longer-term solution set for its customers who don’t want to do their traditional shopping in the store.

Ed Rosenbaum
BrainTrust

I give Walmart credit for trying and experimenting. They seem to always be looking for that next customer convenience. Many of the attempts have not worked. But at least they are experimenting with new or improved ideas. This one, to me, has a way to go before it gets buy-in from the limited number of the public who might need it. It seems they are looking to keep the business, but let the customer stay out of the store. Doesn’t make sense, but they are in the cat bird seat, not me. Why wouldn’t a drive-thru window work more effectively, and without this type of investment?

Carlos Arambula
BrainTrust

It’s a complement to the consumer’s retail experience. The need for convenience will always be a significant factor in the consumer’s decision of retailer and Walmart’s kiosk concept appears to further address that need with the grocery kiosk.

I don’t believe it will compete with home delivery since it satisfies a different consumer need and appeal beyond home delivery.

gordon arnold
Guest

This would be a great add to a gas & go. Walmart has seemingly put these plans on the back burner. Consider this if you will: take away the grocery operations in their big box locations and you have the same variability as SEARS. Retailers like dollar stores and ALDI siphon needed revenue and profits from the the bigger retailer.

What is clear remains to be the saturation of retailers and goods throughout the USA. The woeful numbers of any size retail businesses closing is only surpassed by the weight of underwater commercial real estate. Looming over the promise of better times to come is proof that nothing is to big to fail. Big time Lowest Price Retailers have for decades discounted the need and use of marketing departments and clung to merchandising. Is it any wonder they seem to be charging into the unknown wasting billions on a scheme or a dream, better known as a vision?

wpDiscuz
Braintrust
"This is exactly what I love about Walmart…test, test, test and try, try, try to innovate for the shopper. Never count Walmart out!"
"Complimentary. Customers want choice, and a given consumer may make a different produce collection decision depending on their daily circumstance."
"Speed sounds great. Making it extremely easy to spot is half the battle, so having a standalone kiosk is a good move (albeit expensive). "

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