Robots: Walmart Advances, Amazon Retreats

Robots: Walmart Advances, Amazon Retreats

When faced with anticipated fall-off in consumer purchases, Walmart leans into new robotic solutions. The retailer also re-tasks existing store infrastructure by attaching market fulfillment centers (MFCs)—compact warehouses inside, or tacked onto, retail stores to help fulfill pickup or delivery orders. It gets inventory closer to the customer and amps delivery velocity to serve consumers when they want.

How does Walmart do it? Robotics. To further build and expand its omnichannel fulfillment capabilities, Walmart recently acquired robotics automation company Alert Innovation.

Walmart’s marriage to Alert did not happen overnight. Over the past five years, the retailer has been helping Alert fine-tune its materials handling robotics technology for use in Walmart’s MFCs.

Why buy the company when you can just buy the robots? Just like Amazon did when it acquired Kiva Systems one decade ago, Walmart is bringing Alert’s capabilities in-house to scale the impact of that automation and deploy additional fully operational MFCs more quickly. That 10-year head start helped Amazon write the book on same- and next-day delivery. Walmart is writing the sequel.

Alert Innovation custom-built autonomous bots to store, retrieve, and dispense orders in Walmart’s MFCs. The bots move up, down, and sideways without lifts and conveyors, so they require less space—perfect for a store add-on.

Warehouse space has become increasingly expensive as many U.S. companies have larded up on inventory as a hedge against disruptions. Now, as consumption has fallen, companies large and small are faced with excess inventories and fewer less-expensive storage options. Re-tasking store infrastructure capacity by adding custom-built fulfillment robotics from Alert is brilliant.

A side benefit of robot-assisted fulfillment is it offsets the scarcity of labor for those tasks in some markets. Instead of a Walmart associate walking the store to fulfill orders from store shelves, automated bots retrieve the items from within the MFC and deliver them to picking workstations for quicker assembly, sale, and final delivery. Location and velocity combine to give Walmart competitive props over e-commerce competitors, including Amazon.

And what of Amazon? In one of those rare retail behemoth competitive coincidences, Amazon announced almost simultaneously that it is pulling back on a glamorous and much-celebrated robotic investment and will end field tests of Scout, an autonomous delivery robot. The company is “reorienting the program,” it says, after certain aspects failed to meet customer needs.

Will Walmart’s less glamorous and behind-the-scenes MFC robot fulfillment strategy help meet customer needs? Yup.