February 04, 2022
When I was trying to chase down sweetener for Melissa last week, I noticed the shelving in the back third of our local market were gone and the groceries moved. This was a concern as this was the area where they kept my water and Melissa’s soda. Several employees were still working on the project, and I asked one what was happening. I was told the area was being converted to freezers and walk in coolers to support online shopping. Last year the market had made a similar transition when they marked 20 prime parking spots with signs indicating they were reserved for online pickup. Over the last year I have never seen more than four or five of the spots have cars waiting to receive their orders, and I often notice drivers get out of their cars and enter the store.
When I looked online, I found that Walmart announced last week that it plans to expand its use of high-tech systems that quickly pick and pack online grocery orders. The company anticipates shoppers’ demand for pickup and delivery will outlast the pandemic. Dozens of stores will become fulfillment centers, with a portion of those stores’ footprints turned into small, automated warehouses. Walmart declined to say how many stores will receive the technology or say how much it will spend on the upgrades, but the investment is a key part of how the nation’s largest grocer hopes to fend off rivals competing for online buyers seeking same-day availability, speed, and price. Expansion to these high-tech systems mean they can schedule same-day delivery or pickup and have the groceries ready faster.
During the pandemic, Walmart and other retailers have seen demand for online grocery delivery soar. Walmart’s growth in pickup and delivery peaked at 300% and new service customers quadrupled in the early days of lockdowns. To respond, Walmart boosted slot capacity by 40%. The company is banking that when and if customers feel comfortable returning to stores, they will continue to use the ease and convivence of online delivery. Walmart has made “unlimited grocery deliveries” a central perk of Walmart+, its new membership program. Online grocery orders have pressured grocers’ profits as it forced them to pick, pack and ship orders that customers typically retrieve and transport themselves. It is hoped the bots will make the process less expensive for retailers.
Thoughts: When I pulled into our market’s parking lot, I noticed a car in one of the online stalls with its truck lid up ready to receive groceries. A woman stood unmasked next to the car in conversation with an employee who had pulled down her mask to talk. I drove past the reserved spaces so I could find an open non-reserved stall further away from the store. As I walked back toward the store, I again passed the pair still in casual conversation. They were not talking about groceries. Two things became clear. One, the driver’s motive was about convivence and not safety. Two, although she did not want to “waste time” shopping, she still craved the human interaction of getting out of the house to go to the store and talk to another person. Analytics may need to figure human contact into the automation equation. Do the work. Follow the science. Change is coming and it starts with you.