Will Walmart gain an unrivaled edge by automating its local grocery fulfillment?
Walmart knows that its stores work. The chain, which has increasingly emphasized local fulfillment is, in its characteristic manner, continually searching for ways to do the work more efficiently in order to keep prices down and grow its market share. That’s where local fulfillment centers (LFCS) come in.
Tom Ward, SVP of customer product, Walmart U.S., writes on the company’s blog that LFCs are “compact modular” warehouses that are built within or as an addition to the chain’s stores. The facilities can store thousands of products, from groceries to categories like consumer electronics.
Walmart, which began testing LFCs at a store in Salem, NH, in 2019, is excited about the results it has achieved to date and is working with a number of partners to scale the concept across its business.
Unlike stores where associates walk aisles to retrieve items, LFCs are manned by automated bots that pick orders and bring them to stations where associates assemble them.
Walmart is not leaving everything, however, up to the bots.
“We’ve always said personal shoppers are the secret to our pickup and delivery success, and that remains true. So, while the system retrieves the order for assembly, a personal shopper handpicks fresh items like produce, meat and seafood, and large general merchandise from the sales floor,” wrote Mr. Ward.
Mr. Ward wrote that the retailer has seen concrete benefits from its tests to date, including greater efficiency. One LFC has been able to fulfill orders for multiple stores in an area. LFC operations also are able to pick orders more quickly, which creates more availability for customers, and speeds up delivery and pickup to within an hour.
Walmart is planning to add automated pickup points at some stores where customers can drive up, scan a code at a kiosk, grab their orders and quickly get back on the road.
The retailing giant is not alone in pursuing LFCs, otherwise known as micro-fulfillment centers. Albertsons, Delhaize Ahold and Meijer are among major chains testing similar operations.
Kroger is also developing automated fulfillment centers but on a larger scale, spreading the warehouses across the U.S. The supermarket chain operator is looking to open up to 20 such facilities in partnership with Ocado, the British e-grocery company.
- From Ground-Breaking to Breaking Ground: Walmart Begins to Scale Local Fulfillment Centers – Walmart
- Is Walmart’s Alphabot what the future of e-grocery fulfillment will look like? – RetailWire
DISCUSSION QUESTIONS: Do you see Walmart’s ability to scale local fulfillment centers as a competitive game changer for the U.S. grocery market? Will LFCs or micro-fulfillment centers render large grocery warehouse operations obsolete?