Technology, health focus continues for Walmart as it seeks efficiencies and a ‘second engine’

Walmart is testing dozens of technology applications in its stores in hopes of being the first retailer to achieve a true omnichannel shopping experience at scale. Todd Harbaugh, executive vice president of Supercenters, told suppliers the end goal is saving customers time and money.

Speaking at a Doing Business in Bentonville breakfast on Wednesday (Sept. 11), Harbaugh gave suppliers a glimpse into several technology applications being tested by the retail giant all designed to increase productivity, better serve customers and help Walmart become the most trusted retailer.

From the fast unloader being tested in Walmart Store No. 5260 in Rogers that can quickly get the 4,000 cases off the truck and sorted into the proper bins for restocking, to the Bossa Nova scanning robots now trolling 350 stores, Harbaugh said there is a connection being made. He said the fast unloader knows what products are out of stock because it can communicate with Bossa Nova. Those cases are directed to the bins for immediate stocking. He said the Bossa Nova robots will be in 1,000 stores next year because they are increasing the efficiency in store operations. He said the robots can accurately scan all the store’s shelves three times a day for out of stocks. Prior to Bossa Nova, he said, store employees manually scanned the shelves about once a week.

Robotic floor cleaners are also popular and Harbaugh said they will be in all stores because customers want to shop in clean stores. These robotic floor cleaners can also scan end-cap displays and communicate inventory back to the store’s system. The machines could also record shopper behavior data as they move about the store.

Harbaugh said Walmart is also testing Wally, a self-propelled picking cart. This cart is programmed with the shopping routes for the orders being picked. It drives itself to the shelf and the employee picks the items and places them in the bins. Each personal shopper picks eight orders at once and the route they use is predetermined by algorithms designed to be the most efficient use of time and energy. He said the company is also testing a robotic trolley system used for making faster item returns back to the proper shelves.

Walmart is also testing a robotic picking system known as Alphabot in a store in Salem, N.H. He said this large picking system can pick from 24,000 items which are located in a secured area that was built to house the massive machine. Online grocery orders are picked and sorted by the machine and then carried out to the curb by employees. He said the robot can pick 3,000 orders a day and because it is picking from this separated inventory, there is no disruption in the store from personal shoppers picking orders among customers.

Harbaugh also said the retailer is using an artificial intelligence application dubbed “In-stock assist” that manages on-hand inventory changes automatically, a process previously handled manually by employees. He said inventory records are more accurate since this AI application has been applied. He also said Walmart is using AI to help with shrink (theft or errors) in the self-checkout lines. He said by using AI technology, the machines can distinguish color and size and if a fake bar code is attempted, the register will know and flag the trade. The retailer is also using additional cameras at registers and in stores where theft is most prevalent.

Harbaugh said automatic gates being installed at the front of stores are also a theft deterrent.

SELF-DRIVING CARS, DELIVERY
He said the self-driving cars test in Bentonville to take grocery orders from the picking facility on South Walton to be picked up by customers at the Neighborhood Market on I Street is also a way Walmart can learn about new technology. He said it will take 5G technology speeds before self-driving cars can become mainstream.

Harbaugh said In-home delivery of groceries has unveiled interesting insights. He said the white-glove service is not for everyone, but for shoppers who try it, most of them stick with it and can’t imagine not having it. He said Walmart screens the employees who are allowed to make the deliveries, and they also wear a body camera so their actions are recorded for the customer.

“We know some customers want their orders delivered in a few hours and we are still trying to figure that out,” Harbaugh said.

He said when all these technologies and others are linked together the results could be a game-changer for the retail giant. He also admitted there is a a lot of work to do. When asked about the shortage of employees in areas like paint mixing, automotive and fabrics, he said Walmart is testing a service center checkout that will be located near the back center of the store. He said it will be easier for Walmart to ensure this area is staffed at all times and while it may mean customers have to walk further, there should always be someone there to help.

He said there are five stores with these service centers and the response has been good. He said the service centers will be part of all Supercenter remodels. He said the retailer is also experimenting with ways to reduce the need for service in areas like fabrics by offering more pre-cut fabrics. In stores where there are lots of paint sales, he said Walmart will staff up.

SECOND ENGINE
Harbaugh also gave suppliers a glimpse into the retailer’s newest format —Walmart Health. He said the first store with this new health clinic is in Dallas, Ga., and the grand opening is slated for Friday (Sept. 13). He said Walmart is already starting to build a second location, though he didn’t say where.

“Greg (Foran, Walmart U.S. CEO) calls this new format the second engine,” Harbaugh said.

He said this broader health initiative is part of Walmart’s plan to be disruptive by offering low-cost services to a host of consumers who have high deductibles with their health insurance but would pay cash for maintenance care. Harbaugh said this service is a compliment to what the retailer is already doing with pharmacy and eye care. He said the new health clinics will be located in front of the Supercenter, built out between the two main entrances of grocery and general merchandise with pharmacy and eye clinics located nearby at the front of the store.

Walmart has dabbled with healthcare clinics in the past in select markets where the retailer found consumers needed a low-cost choice. This latest edition of Walmart Health comes after the retailer has worked to improve operations, launch and expand Walmart online grocery and shore up the U.S. business with solid comp sales growth over 20 straight quarters.

Walmart was truly disruptive to healthcare years ago as the first to offer the $4 generic drug, but it has not had that same success in the healthcare services it has attempted.