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07/25/2017

Walmart Is Upping Its Fulfillment Capabilities with Major Tech Investment

Tim Denman
Editor in Chief
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Walmart Fulfillment Tower

When Walmart rolled out its massive vending machine style in-store pickup technology last year in a limited pilot it was unclear whether the investment was a gimmick or a vital piece of the retailer’s in-store experience. It appears to be the latter.

Walmart announced that it is ramping up the rollout of its gigantic fulfillment towers over the next several months. Currently just 20 Walmart locations feature the fulfillment towers, but another 80 are expected to be installed throughout the chain over the next few months, according to Business Insider.

The towers are a major step forward in the in-store pick-up experience, which has become a vital capability for Walmart in its ongoing battle with Amazon for consumers’ hearts, minds and wallets. Shoppers have become accustomed to the two-day, next-day and in some cases same-day fulfillment capabilities of Amazon and are making purchase decisions based on retailers’ ability to match the online giant’s fulfillment prowess.

Walmart, like many omnichannel retailers with a sprawling physical presence, is looking for ways to leverage its massive physical network to fulfill online orders at speed. One way to get orders into shoppers’ hands as quickly as possible, while significantly lowering fulfillment costs, is to offer in-store pick-up on online orders.

While 35% of retailers either currently offer or will implement click-and-collect capabilities in the next 12 months, according to RIS News’“14th Annual Store Systems Study,” few of them have truly optimized the experience. Many still relegate in-store pick-up to an afterthought, with an understaffed and inefficient pick-up counter located somewhere in the back of the store. Walmart’s approach with its fulfillment towers is much different.

They are placed front and center at the store entrance and are a visually appealing focal point. The gigantic fulfillment towers serve two key purposes: they get online orders in the hands of shoppers quickly and efficiently and they provide a cool, tech forward atmosphere that prominently displays Walmart’s in-store fulfillment capabilities.

All online shoppers have to do when they approach the machine is scan their receipt. Within a minute their purchase is rolling out of the tower and into their hands. Basically the tower takes the pick-up locker experience and supercharges it. Inside the machine is hundreds of customizable “lockers” that can shrink and expand depending on the size of the items place in it. When the customer scans their receipt the machine quickly locates the appropriate storage container and places the items on a belt conveyor.

While the concept is simple, it could have a big impact on Walmart’s in-store fulfillment experience, helping customers retrieve their orders quickly while simultaneously promoting the service to others by its sheer presence. The financial impact of the fulfillment towers is unknown at this time. But the fact that Walmart is increasing its investment five-fold in the technology is a major indicator that the automated fulfillment stations are making their presence known and they are here to stay.

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