Will Walmart’s decision to scrap robots have far-ranging effects?

Discussion
Photo: Walmart
Nov 03, 2020
George Anderson

Walmart has experimented with the use of robots for carrying out a number of functions on sales floors and back rooms in recent years with the goals of improving operational efficiency, reducing costs and freeing up associates to look after the needs of customers in stores and those placing online orders being fulfilled locally. At least one of those experiments is about to end.

In what some may see as the modern version of the John Henry tale, Walmart has decided that robots it has been using to keep track of its in-stock positions on store floors can be replaced at a lower cost with its human associates. The retail giant has discovered that the small army of workers it already has picking store shelves throughout the day to fulfill online grocery orders can more quickly draw attention to low inventory and out-of-stocks than wandering robots.

A Wall Street Journal article also reported that John Furner, CEO of Walmart U.S., had concerns about how the chain’s customers react to seeing robots moving about its stores. The chain had robots conducting inventory management functions at roughly 500 of its 7,400 locations before pulling the plug.

Walmart’s decision to scrap the use of robots appears to be limited to those designed specifically to take in-store inventory. It continues to use floor scrubbing models to assure regular cleaning of its stores. The retailer began rolling out the floor scrubbers in 2018 and has continued to expand their deployment since.

Interest in employing robotics for a variety of tasks has only increased with the novel coronavirus pandemic. Retailers are looking at the use of the automated devices in areas such as salad bars and foodservice operations to help reduce human contact and protect the safety of associates and customers alike.

Other use cases include mini- or micro-fulfillment centers. Walmart began testing its Alphabot solution earlier this year in a fulfillment center built onto the back of one of its supercenters located in New Hampshire. The system uses autonomous carts to retrieve and assemble online orders of frozen, refrigerated and shelf-stable products for pickup and delivery. Associates check each order to assure accuracy and bag the products to go out to customers. Fresh items continue to be picked by humans, as well.

DISCUSSION QUESTIONS: Will Walmart’s decision to scrap the use of robots for taking in-store inventory influence how other retailers approach the technology? Where do you currently see the most beneficial use cases for robotics in retailing and where do you expect it to be five years from now?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Moon shots don’t often happen early in the game."
"I think there are and will be many other use cases for robots. We are still in the Dark Ages in terms of the possibilities."
"The impact of COVID has perhaps wakened retailers to better understand that years of squeezing in-store human resources were overdone."

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28 Comments on "Will Walmart’s decision to scrap robots have far-ranging effects?"


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David Naumann
BrainTrust
David Naumann
CEO and President, Cogent Creative Consulting
3 months 27 days ago

Walmart’s decision to stop using robots for taking in-store inventory sounds like a strategic move that may have been partially driven by the public image of this decision in a time when unemployment is still very high. There are certain tasks that are more appropriate for humans while there are many repetitive tasks that are more efficiently and cost effectively done by robots. The key is to know the difference.

Neil Saunders
BrainTrust

Walmart has correctly recognized that the robot is doing nothing that the associates already in the store undertaking a variety of other tasks can’t do. If the robots identified a gap and then autonomously filled it with stock it might be a different story, but doing a partial job is pretty useless in my view. However Walmart isn’t abandoning robotics. More investments will be made in the supply chain and fulfillment, but these will be focused on where robots can generate good returns and make a tangible difference to the business.

Mark Ryski
BrainTrust

Test, fail — next. The decision by Walmart to eliminate in-store inventory robots is not indicative of the retailer’s long-term position on the use of robots – this recent decision merely says that Walmart will only continue to deploy solutions that make sense. While we’ll never know all the factors that led to this decision, I respect Walmart’s discipline in shutting down what doesn’t work. The world of robots is at such an early stage, it’s all still very experimental. Robots will play a larger and more visible role in retailing – it’s only a matter of time.

Bob Phibbs
BrainTrust

I don’t care how you slice it, this is a big scar for the promise of robots and technology solving all retail problems. This was not a trial – this was a five-year program highly lauded. In addition, “Walmart U.S. chief executive John Furner has concerns about how shoppers react to seeing a robot working in a store.”

Gene Detroyer
BrainTrust

The robots will surely be back.

Bob Amster
BrainTrust

I agree!

Dr. Stephen Needel
BrainTrust

Good for them – it should be, and was, a financial decision (and the tie should go to the humans).

Suresh Chaganti
BrainTrust

It is a good test case to show that automation is not panacea for every problem. At the same time, we should not be reading too much in terms of the relevance of automation in retail.

Using drones to gather inventory information in-store makes a lot of sense. Robots may not have.

Heidi Sax
BrainTrust

This will be an influential decision for inventory bots. If any retailer had the square footage and assortment to automate in-store inventory with robots, it was Walmart. The task of keeping the floor stocked from the bottom up actually requires quite a bit of critical thinking. Tech that helps humans do it more efficiently is more promising than removing humans from the equation altogether.

For now, let the bots handle clean up. In five years, we’ll reassess. But given the duration of this experiment, I’m skeptical it will look much different then.

Jeff Sward
BrainTrust

Gotta love testing and experimenting. Learning as opposed to guessing or moving ahead too hastily. This is a postponing of robotics, not a dead end. The learning simply says not today, not with this technology and these tasks. But it had to be explored. Moon shots don’t often happen early in the game.

Bob Amster
BrainTrust

Walmart’s move to stop using robots for inventory management may have been partially motivated by public image in this time of significant unemployment and lesser-than-expected returns on the investment. All that notwithstanding, Walmart and other retailers may well test this technology again. A poor analogy is the failure of Apple’s Newton only to reappear two or so decades later as a smartphone. Time will tell…

Gene Detroyer
BrainTrust

They will be back.

The current robot technology for which Walmart hoped is obviously not up to the objectives originally set out. But is just a matter of time, as the technology and ability of the robots and acceptance of robots increases, until Walmart and others will bring them in.

Robots will eventually replace all mundane human activity in stores. Eventually may be five years but not likely, 10 years confidently.

Even in China robots are taking over much of mundane activities which is causing unemployment problems. As an extreme example, a factory that once employed 20,000 workers now employs just 2,000.

Raj B. Shroff
BrainTrust

I do think Walmart’s decision to scrap robots in this particular instance will influence how others approach it. They are at the forefront of many things in retail and most look to them for signals on what works. And if it’s not cost effective across Walmart’s fleet, most other retailers, even if they have the fleet, don’t have the physical store size to justify this.

I think there are and will be many other use cases for robots. We are still in the Dark Ages in terms of the possibilities. Bossa Nova is a bit too early in this case. I hope they take the market feedback, adapt and evolve.

Dave Wendland
BrainTrust

Lessons learned and Walmart has recognized that it’s time to reassess. Here’s what I glean from this decision:

  1. The timing may have been wrong (due to the cloud of unemployment and the fact that appearances matter);
  2. Tasks may be incomplete (partially solving an issue is a bandage on a bigger logistics issue);
  3. Perhaps the technology requires more tweaking and integration (technology alone seldom solves a systemic problem — in this case out-of-stocks);
  4. Full and collaborative support may need to be rebuilt (this presents an opportunity to engage and collaborate with store associates more deeply).

In my opinion, this “test” has now been scrapped, but there’s another solution already in the works and we’ll most definitely see robots emerging in other areas very soon — and perhaps returning to the aisles within Walmart.

Ken Morris
BrainTrust

I agree with Walmart’s decision to scrap the robots for taking inventory but their usage in micro-fulfillment centers (MFCs) is far from over. The robotic MFC technology is the wave of the future and they have picked a superior partner with the Alert product. During the height of the pandemic my New Hampshire brethren didn’t have to wait two weeks for a grocery delivery slot, they were getting next-day grocery delivery while I felt lucky if I could get into the queue for delivery 14 days away. This robotic technology frees up the store space for shoppers and not Instacart people manually clogging the aisles and it gives grocers ownership of the customer vs. Instacart.

Bindu Gupta
BrainTrust

This is a great example of testing and learning. Walmart is making a data-driven decision which is highly recommended during such volatile times.

Dave Wendland
BrainTrust

Absolutely correct, Bindu.

Oliver Guy
BrainTrust

Wow, this is amazing. I had not expected this. Given the need to increase efficiency and also minimize the number of people in-store this seems counter-intuitive. It will be fascinating to see how things develop surrounding this kind of solution because others will look at Walmart’s decision as being indicative.

Peter Charness
BrainTrust

Online grocery shopping continues to suffer from inaccurate inventory positions, with non real-time updates. This leads to highly unacceptable rates of substitution and poor online order fulfillment. In-store order pickers are racing against a clock, and I really wonder how well they will be reporting stockouts or mis-located products under those conditions. I suspect as costs come down, permanently-placed (shelf edge) video cameras will be doing some of this work. Robots and browsing shoppers didn’t mix well.

Andrew Blatherwick
BrainTrust

Walmart tried and decided this was not the right use of robots in their stores, but they will continue to trial uses of robotics. Some will work, some will not. Given the huge increase in online sales and hence order pickers in their stores, it is not surprising that they feel they have enough people on the shop floor to spot out-of-stocks. There are also other ways of identifying out-of-stocks on shelves without the cost of robots. Store inventory solutions show which items are about to run out of stock on the shelf and staff can be directed to check. Online order pickers can report them or be used to check and if they run out of an item on an order it should trigger a replenishment anyway.

There are many places where robots will be very successful. Dark store picking and on-site micro-fulfillment centers are just two. Let’s not try and make robots the answer to everything and then reject robots completely when they are found not to be good at certain jobs.

Shep Hyken
BrainTrust

How many times did Edison fail before he invented the light bulb? And was that first iteration the final version? No! And what would have happened if Bill Gates stopped with Windows 1.0? Maybe the robots aren’t ready for prime time, but they need to be used at some level to get closer to what they need to be. People (customers and employees) still marvel at robots. Eventually they will be common and go almost unnoticed. And they will work.

The best use for robots in retailing? I think we already know the answer. The question is, as this article summarizes, when will they be a viable way of managing inventory, cleaning stores, directing customers, and more?

Mel Kleiman
BrainTrust

I am sure this is a decision based on data not feeling. What works for Walmart may not work for others. Robots are here to stay. Employees still can be more flexible.

Kai Clarke
BrainTrust

We are overreacting to the term of robots here when in-reality we use “robots” every day in the grocery store to do things like carry checkstand food on a belt, scan and tabulate product, help move pallets and offload product using forklifts, clean floors, etc. Stopping this usage should be a simple cost/benefit effect, not an impression of how customers react to these.

chris-marti
Guest

While this definitely sets the “robot takeover” narrative back, I think the real takeaway is that autonomous robots didn’t fit Walmart’s plans specifically for automated shelf inventory. While I firmly believe that there are certain retail store interactions that will always require a human touch, to quote a famous robot, “[they’ll] be back!”

Brent Biddulph
BrainTrust

The impact of COVID has perhaps wakened retailers to better understand that years of squeezing in-store human resources were overdone. What a wonderful thought — we as consumers may actually be able to find store associates in the aisles again! Hopefully, the of viewing these front-line heroes as simply “labor” are over.

Karen Wong
BrainTrust

It’s an interesting balance. Only those large enough have the scale to use robots but these same retailers are often big enough to have their own picking teams for online fulfillment from store.

If the scale is there, I still believe that online fulfillment is more efficient with dark stores or direct from warehouses (DC or in-store) where the use of robots is ideal e.g. Ocado. It was different when e-commerce was an insignificant % of sales but the loading and merchandising of customer-facing shelves for a large volume of internal order picking drives me crazy.

Ricardo Belmar
BrainTrust

Walmart has become a master of data analysis and in this case, the data is telling them their surge in associates handling in-store order picking during the pandemic has produced similar, or better, results than the robots did at tracking shelf inventory. You can also read from John Furner’s statement that Walmart is sensitive to the appearance of robots performing jobs humans could be doing during a period of extremely high unemployment. Take those two factors together and Walmart has run the numbers and concluded deploying robots to their thousands of stores for this use case isn’t worth the effort. Let’s recognize they are not doing away with robots — floor scrubbing robots, also used by Schnuck’s Market, for example, will remain. As a counterpoint, Schnuck’s is increasing the use of robots for shelf counts and temp checks in-store. So clearly this analysis is not universal for all retailers.

While the robot revolution might not be led by Walmart, the robots are certainly not going away!