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How Walmart is disrupting its own model to reshape retail

3 ways the retail giant is fueling innovation in a surprising place: physical stores

How Walmart is disrupting its own model to reshape retail

As the world’s largest company by revenue, Walmart’s physical footprint is massive: It operates nearly 4,800 retail stores in the U.S. alone. But as shopping habits change, staying competitive at scale means evolving quickly to meet customers where they are.

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That means infusing its vast network of stores with digital-forward initiatives, including several startup partnerships and cutting-edge technologies. Think self-driving cars that deliver items to customers’ homes, giant vending machines that spit out online orders, and drive-in grocery pickup where customers can get fresh produce without ever leaving their cars.

Within a traditional retail environment, the technology stands out. But to Tom Ward, Walmart’s senior vice president of digital operations, the tide of innovation can be traced back to one simple principle. “It all goes back to helping people. How do we help busy families save money? How do we help them save time in their busy days?” he says. “If we can figure out a way to do either of those things—especially through our e-commerce channels and robotics and automation and technology—then we’re all about doing that.”

Here are some areas in which Walmart is innovating to achieve that goal.

DOOR-TO-DOOR DELIVERY—IN SELF-DRIVING CARS

Partnering with Waymo (formerly a division of Google), Walmart launched an autonomous vehicle delivery pilot program last summer in Chandler, Arizona. Ward says the test aimed to answer a number of basic feasibility questions:

  • How would customers react to an autonomous delivery service?
  • What would it look like when a self-driving car pulled up to a store to be loaded?
  • How would groceries go in—back seat or the trunk?
  • How would the customer interact with the vehicle once it arrived at their residence?

Using data from the Waymo pilot, Walmart launched another test in November 2018, partnering with delivery startup Postmates to deploy automated vehicles from Ford in Miami-Dade County, Florida. Ward describes the Ford partnership as unique. “They turned their attention to packages that are less complex, within a tighter [delivery] radius and within a more defined series of parameters,” he explains. “So instead of figuring out the long-term macroeconomics, we can negotiate with these providers and potentially bring that fee down—and share that [savings] with our customers.”

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This year, Walmart launched its most customized automated delivery pilot yet: cargo vans built from the ground up to deliver fresh groceries by automated vehicle manufacturer Udelv. “Udelv were different in that most [automated-vehicle] companies tend to think about moving people,” Ward says. “But we move products to people. Their [mission] was more in line with ours, which is to get these groceries to someone’s door as easily as we can.”

ORDER ONLINE, PICK UP AT KIOSK

Inside its stores, Walmart is installing next-generation technology that gives customers new ways to shop. The company has installed “pickup towers”—vending-machine–like retrieval systems for general merchandise—in more than 1,200 stores nationwide. Now shoppers can order online and pick up their items on demand. Plus, they have peace of mind, knowing that expensive items such as electronics are kept safe, rather than sitting on their doorsteps all day.

“Previously, customers would have waited at a counter or found an associate to help retrieve that package,” Ward says, likening the service to how ATMs have eliminated the need to enter a bank to withdraw money. “It’s a great example of an innovation that truly solves a problem.”

Walmart is testing a similar concept specific to groceries at a store in Sherman, Texas: a refrigerated grocery kiosk that allows customers to place an order, scan a code, and grab their perishable goods. Walmart is “planning to scale that up,” Ward says, noting the pilot has garnered positive reviews from customers who want to get their groceries home as soon as possible.

GROCERIES DELIVERED TO YOUR CAR DOOR

In online grocery pickup, human touch and technology combine to create a simpler, faster experience for shoppers. Customers can fill their baskets online, select a convenient pickup time, and receive those groceries at a designated pickup area—without ever having to enter the store. Specially trained personal shoppers select the ordered items throughout the store and bring them right to the customer’s car in the parking lot. More than 2,700 Walmart locations currently offer free grocery pickup, and 400 more are slated to add the service in 2019.

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Walmart is testing ways to make grocery pickup even speedier and easier for both its customers and its associates. In Salem, New Hampshire, Alphabot, a first-of-its-kind network of automated mobile carts, retrieves ordered items from storage and brings them to employees at one of four “pick stations.” The personal shoppers—who still handpick items such as produce and other fresh goods—then collect and pack the order, doing so more efficiently than they could have if they had to walk the store to retrieve items.

Beyond grocery pickup, in many U.S. cities Walmart also provides online grocery delivery. More than 1,100 Walmart stores offer same-day grocery delivery, with plans to expand to 1,600 locations by year end.

WHAT’S NEXT

This fall, Walmart is also taking grocery delivery a step further. In three markets, the company is testing a unique service called InHome Delivery, allowing customers to have groceries delivered directly to their refrigerators. InHome Delivery associates will be highly trained using smart-entry technology and wearing cameras so customers can control access to their homes and watch the delivery remotely if they like. More than 1 million customers will have the chance to try InHome Delivery through the pilot program in Kansas City, Missouri; Pittsburgh; and Vero Beach, Florida.

For Ward and his team in digital operations, every innovation—no matter the scale or state of deployment—serves the same core goal. “They’re all pieces of a puzzle that help us learn what makes sense to customers and what improves their experience—and how we plan where we go next,” he says. “As customers’ needs change, the need to save time is on par with saving money. They know we’ve got great prices, and they’re increasing their trust in us to save them time. That message flows through the way we think as an organization.”


This article was created for and commissioned by Walmart.

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