Say goodbye to Walmart’s robotic towers

Discussion
Photo: Walmart
Apr 22, 2021

Walmart is committed to its online order and store pickup program. As it turns out, however, how those orders are being picked up is a bit different than some of the retailer’s leadership may have been envisioning a year or more ago. Walmart is removing its automated in-store pickup towers from some of its locations and turning them off in others as it focuses on fulfilling orders at the curbside, reports The Wall Street Journal.

The retailer has pulled the 17-foot high vending machines from service in 300 locations while another 1,300 have been “hibernated,” according to Larry Blue, CEO of Bell & Howell, the vendor Walmart hired to install and maintain the devices. The retailer first began installing pickup towers in its stores in 2017.

Walmart, for its part, told the Journal that the decision was made by shoppers. “The customer told us they want one pickup spot, and they want that pickup spot to be outside,” said a spokesperson for the retailer.

This is not the first news of Walmart stepping back from robotics in its stores. The retailer pulled the plug last year on using robots to track its in-stock positions on store floors after determining that the same task could be done less expensively using its associates. Walmart found that the large numbers of personal shoppers working in its stores were able to quickly identify low levels of inventory and out-of-stocks on shelves. Robots, in this instance, were a redundancy.

Walmart’s partial retreat from its use of robotics should not, however, be read as a souring on automating tasks to improve its performance and support margins. Clear evidence of this is the retailer’s scaling of automated local fulfillment centers (LFCs).

Tom Ward, SVP of customer product, Walmart U.S., wrote in January on the company’s blog  that the retailer was increasing its emphasis on fulfilling online orders locally. The retailer first began testing LFCs, “compact modular” warehouses built within or as an addition to a Walmart store, at a location in Salem, NH, in 2019.

The retailer has since begun working with a number of partners to help scale LFCs, which use robots to pick orders that are then assembled by human associates, to quickly fulfill orders for a wide variety of products at a lower cost.

DISCUSSION QUESTIONS: What is driving automated technology tests at retail and how can retailers better prioritize their investments? What is your take on the approach that Walmart has taken to date?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Automated technology tests for retail are typically driven by the anticipated reduction in labor costs and not by customer demand. In the end, customers’ preferences win."
"All retail benefits from this sort of forward thinking, so long may they continue to push the boundaries."
"Walmart keeps trying and keeps finding the right path. They will continue to do so. They think the future."

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32 Comments on "Say goodbye to Walmart’s robotic towers"


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Mark Ryski
BrainTrust

Efficiency and cost reductions which will impact profit are the motives for deploying this type of technology, but as this article makes clear, robots/automation don’t always beat humans. I’m impressed that Walmart abandoned this project with 300 stores already deployed – to stop the project now based on customer requirements shows a sign of maturity in their approach. Testing and then rejecting a technology solution is not a failure, it’s a learning and Walmart has become a very good learner.

Cathy Hotka
BrainTrust

All through 2021, retailers will be evaluating the solutions they came up with during the pandemic, with an eye toward improved efficiency and profitability. Smaller retailers should watch what the big companies are doing and follow suit.

Bob Amster
BrainTrust

We are communicating telepathically now?

Bob Amster
BrainTrust

The drivers of automated technology tests are improved efficiency and customer service. The likes of Walmart and any other retailer with deep pockets will continue to experiment out of their R&D budget. They can afford to. Consequently those retailers will lead in their respective categories. Industry-wide adoption will come after the technology is proven by the big companies to deliver on the two drivers and after the costs come down, as they always have with technology.

Raj B. Shroff
BrainTrust

I think there are at least two drivers. Some retailers want tech for tech’s sake because their executives experience something cool and tell their team to try it. Others do it because there is an unmet need that technology can solve. I don’t think the first path is a bad one IF they are intentional and create some working hypotheses and intend to test and learn. Unfortunately, I still think tech for tech’s sake drives many — not the shopper need, and that’s never good in my view.

I have no issue with Walmart’s approach. In my experience, they have been very open-minded with testing, are usually in touch with their shopper and have a willingness to admit when something doesn’t work. Incidentally, I never liked the towers, they seemed odd so they won’t be missed.

If shoppers want pick up outside, give them pick up outside. For a historically operational efficiency driven company, the fact they are listening to the shopper and meeting their needs is a great thing.

Keith Anderson
BrainTrust

The drivers of automation tests are pretty clear: pressure to maintain service levels while managing labor expenses; the unfavorable unit economics of online versus self-service retail; and, most recently, the comparative resilience and reliability of robots during a pandemic.

It’s perhaps unusual to see such a large, relatively capital-intensive initiative suspended or rolled back so quickly, but Walmart is clearly following its customer and continuing to invest in future-ready operations.

Given its scale and leverage, perhaps Walmart is also negotiating favorable terms with some of its partners, enabling it to test and learn nimbly while sharing or shifting the risk to emerging technology providers eager to produce case studies.

Suresh Chaganti
BrainTrust

As pointed out in the article, it is important to get the right takeaways. Robots have a big place in warehouses and MFCs. It could work very well during night times in 24×7 stores when they replenish.

The key thing to remember for in-store technology is that it has to enhance the customer experience. When robots share aisles with shoppers, it is an annoyance once the novelty wears off.

Jeff Sward
BrainTrust

The quest for cost savings, efficiency and ROI has only been magnified and accelerated by the pandemic. But if an idea that sounded good before the pandemic doesn’t work during the pandemic, then it’s time to cut bait and move on. Exploration and pioneering work can lead to a lot of dead ends. I mean, people are buying cars from “vending machines,” so surely they will work in our stores! I’ll continue to applaud Walmart for their continual testing of boundaries and their efforts to continually expand the range of shopping experiences they offer.

Gene Detroyer
BrainTrust

As Edison said, “I have not failed 10,000 times — I’ve successfully found 10,000 ways that will not work.” Operators like Walmart will keep discovering what is needed to satisfy the customer and what is not.

Gary Sankary
BrainTrust

Automation certainly has a place in retail for operational, repetitive types tasks. We’re still working through the growing pains for sure. The benefits are obvious: workforce reduction, accuracy, and 24/7 availability. For tasks like inventory scanning in aisles — the test that Walmart has walked away from — it’s difficult to balance the cost of the a robot, which can only preform a specific task with a team member, who is flexible and can interface with customers as needed. I give Walmart a lot of credit for trying different types of technology in their stores. I also give them credit for stopping tests when they don’t think they’re getting the desired outcomes.

Bob Phibbs
BrainTrust

I think it is a big stretch to call these robots. Quite simply, they didn’t work out. This relentless push to keep people curbside to me is short-sighted. I doubt many have ever said, “Please, can we drive down to a parking lot and wait to pick up our stuff?”

George Anderson
Staff

I know a number of people in the 50+ age group who were not online grocery shoppers prior to the pandemic who have come to value the convenience of scheduling curbside pickup orders. This is, in large part, because it gets them out of walking around large stores and then having to stand in the checkout lane. My guess is that the same applies for many Walmart Supercenter shoppers. Seems a logical response by Walmart to a customer ask.

Bob Phibbs
BrainTrust

My point is, brick and mortar stores excel at discovery. People go out to see what’s new. Fulfillment is getting all the attention when demand will be the key. Unless you use the store for more than a warehouse, and unless you’re one of the big 6, it simply doesn’t scale for the ROI

George Anderson
Staff

Bob, your point is well taken. I don’t think, however, that it means an end to in-store shopping especially in grocery where people typically find themselves having to make a quick run for an item or two to prepare a meal. What I think it does is it ups the ante for retailers in several ways online and in stores. Number one – they need to do a better job of creating opportunities for discovery online (better recommendations come to mind). They could also find opportunities for messaging at the point of pickup. Most importantly, I think, is that they need to elevate both the levels of service and presentations in stores to provide the types of experiences that consumers want to repeat.

Bob Phibbs
BrainTrust

And I would say this is being sold to us that it is widespread when it is a niche of a channel to fulfill. The danger is people saying this is the way of the future and anyone who doesn’t do it is a Leviathan.

Paula Rosenblum
BrainTrust

Here’s the thing about in-store technologies: Mechanical stuff breaks. And when they break, they require attention. Store personnel are not equipped to manage the more sophisticated of them.

It’s simply easier to have someone take the order out to a car. If you’ve ever been a practitioner, you know this is true. And that’s why various technologies like Amazon Go will not last. I like the Bell and Howell concept, but sadly, it apparently is too much as well.

David Naumann
BrainTrust
David Naumann
Marketing Strategy Lead - Retail, Travel & Distribution, Verizon
4 months 26 days ago

Automated technology tests for retail are typically driven by the anticipated reduction in labor costs and not by customer demand. In the end, customers’ preferences win. Walmart’s test and evaluate approach is smart and adapting to whatever is best for the customers is a smart strategy. Automated robots still have a lot of great use cases, especially for repetitive tasks that don’t interact or interfere with customers.

Shep Hyken
BrainTrust

First, the consumer would rather have the convenience of curbside pickup, rather than going inside. Second, what is most efficient for Walmart? What system allows them to track inventory levels and deliver merchandise to the customer in the most efficient way possible? The system has been in place since 2017, which is four years ago. So, maybe it has aged out and it’s time to find a better system. There is a balance between efficiency and the customer experience. Walmart knows what it is doing.

Andrew Blatherwick
BrainTrust

It is very refreshing and honest of Walmart to admit when they get things wrong or make changes, especially when driven by customer comment and sentiment. It is great that they listen to their customers and make changes where necessary. This does not mean that all robotics technology is wrong or that Walmart has wasted their time trialing these things. If they had not done so they would not have learned and been able to move on. Better to try, monitor and change than not try at all.

Very large retailers like Walmart can afford this sort of experimentation. It helps the whole industry, as smaller players could not stand the cost or the loss of trying and having to change. All retail benefits from this sort of forward thinking, so long may they continue to push the boundaries.

Jeff Weidauer
BrainTrust

This is fast-fail testing in action. Walmart tried robots, started rolling them out, but when customers wanted something different, Walmart pulled back. Many companies would have chased the sunk costs and tried to make it work anyway.

Lisa Goller
BrainTrust

Consumers’ heightened expectations of speed, convenience and good value are driving tech tests. Efficiencies save shoppers time and money.

To prioritize their investments, retailers can examine their overall strategy to spot risky gaps. Filling those gaps could involve tech investments, partnerships or acquisitions.

While Walmart is a traditional retailer, it’s far from allergic to technology. In 2005, I covered its RFID pilots. Since then, I’ve been fascinated with how Walmart and Amazon approach omnichannel from opposite ends of the retail spectrum. Walmart’s pickup towers and in-aisle robots stood out as unique innovations for a retailer known for its stores.

Yet that’s why retailers test: to see if there are better ways to make shoppers happy and loyal.

Matthew Brogie
BrainTrust
4 months 26 days ago

I think what’s abundantly clear is that there is massive change going on at retail. Brick and Mortar retail is absolutely alive and well, but the pace of change and adaptation have significantly accelerated over the past year. This sets up an environment where testing of all kinds becomes even more of a requirement. I’m sure we’ll see substantial changes to store layouts, footprints and levels of automation as retailers figure out how to optimize the relationships between picking for eCommerce, speed of fulfillment and delivery, in-store pickup and traditional “down the aisle” in-store shoppers.

What we know is that things will look different even one year from now, and that the path to what that future state is will not be a straight one; there will be a lot of great ideas and innovations that will have to prove themselves along the way.

Gene Detroyer
BrainTrust

“The customer told us they want one pickup spot, and they want that pickup spot to be outside,” said a Walmart. That in itself is a huge statement. Would this be a customer’s statement 5 years ago? I am confident that in the same studies that this conclusion was surmised, that there were other nuggets that emphasized how import time saving and convenience is for the customer. It is an unstoppable trend for the foreseeable future. It suggest how grocers and other retailers should be prioritizing their investments and focus.

Walmart keeps trying and keeps finding the right path. They will continue to do so. They think the future.

Jennifer Bartashus
BrainTrust

Retail has evolved, and so has the need to be flexible and adaptable with technology solutions across the organization. Walmart has changed its culture to be one that is open to trial and error, to make quick decisions about what is and is not working by watching consumer behavior and to keep testing new concepts with an eye to improve the customer experience. This is what more retailers will need to do to remain relevant in a rapidly changing environment. Sticking with something that isn’t working is just poor management.

Every test brings learnings to the organization that help it grow. No more robotic towers? Doesn’t mean those learnings won’t reappear in another form.