Walmart Steps Up Automated Store Distribution

As Walmart dives deeper into store fulfillment, the retailer has been redesigning its retail tech to support this new supply chain model.

The retailer has increased the number of digital orders coming from its stores by 170% in the last year, leading it to scale its automated market fulfillment centers, tap machine learning and test autonomous delivery, it said in a recent online post.

To support this, Walmart built a tech platform that powers its last-mile delivery ecosystem. Agnostic to supply and demand, and built around its own marketplace, the platform uses automation and machine learning to turn a “near-infinite” number of factors into usable data.

“Our new platform is doing revolutionary things,” explained Srini Venkatesan, EVP for Walmart Global Tech. “With all these disparate points of delivery in a sense ‘communicating’ with one another, we can plan replenishment at a shorter cycle, gain close-to-real-time insights of inventory and ultimately react to customer demand. All of that adds up to a single stellar shopping experience for Walmart customers.”

Market Fulfillment Centers

Walmart said it increased store pickup and delivery capacity by 20% last year and plans to increase this by another 35% this year.

“As we continue to enhance store operations, it’s clearer than ever why our massive store footprint is the quiet, even unexpected, advantage to driving change,” said TJ Stallbaumer, Walmart Corporate Affairs.

The next phase of Walmart’s store integration and evolution is adding more market fulfillment centers to stores. Market fulfillment centers are a compact, modular warehouse built inside or added to a store, which, in addition to fresh and frozen items, can store thousands of the items.

Walmart explains: “Instead of an associate walking the store to fulfill an order from our shelves, automated bots retrieve the items from within the fulfillment center. The items are then brought to a picking workstation, where the order can be assembled with speed.

"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. Once the order is collected, the system stores it until it’s ready for pickup. This whole process can take just a few minutes from the time the order is placed to the time it’s ready for a customer or delivery driver to collect.”

Walmart began piloting its first market fulfillment center in Salem, N.H., in 2019 and recently announced it is planning dozens of locations, with many more to come. In some stores, it will also add automated pickup points. 

With 4,700 Walmart stores across the country, located within just 10 miles of 90% of the U.S. population, Stallbaumer said Walmart is in the "unique position" to make these brick-and-mortar locations invaluable parts of its supply chain.

Autonomous Delivery

Walmart has also been testing drones and autonomous vehicles to fulfill order in the last mile. Last November, Walmart started offering residential drone delivery of consumer goods from its first airport “Hub” in Farmington, Ark. In the same month, Walmart became the first retailer to operate a fully driverless “middle-mile” delivery route. Walmart is using Gatik’s autonomous vehicles, to deliver items between stores to shorten delivery times and limit out-of-stocks.

“As we continue to create new delivery options for customers and members, and new capabilities for Walmart GoLocal clients, we add density to the last mile,” said Tom Ward, chief e-commerce officer, Walmart U.S. “With more density comes more opportunities for drivers, and more opportunities result in increased speed. This means we can get customers and clients their items even faster, all while helping lower costs. It’s a happy cycle."

Bentonville, Ark.-based Walmart operates approximately 10,500 stores under 48 banners in 24 countries, and e-commerce websites, employing 2.2 million-plus associates worldwide. Walmart U.S. is No. 1 on The PG 100, Progressive Grocer’s 2021 list of the top food and consumables retailers in North America.