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Retail behemoth Walmart (WMT), the world’s largest seller of groceries, will begin adding local fulfillment centers at select supercenter stores that will include grocery-picking robots as demand for online pickup and delivery continues to surge.
During the COVID-19 pandemic, Walmart’s online grocery pickup and delivery have continued to post record-high sales volumes, according to the most recent third-quarter earnings results. At the end of the third quarter, Walmart offered pickup across 3,600 of its stores and same-day delivery across 2,900 stores. Walmart operates a fleet of more than 4,700 stores, with approximately 90% of the U.S. population living within 10 miles of a location.
“Our customers love the speed and convenience of pickup and delivery, and we’re committed to finding faster ways to serve them, which is why we’re scaling the number of stores that will also serve as local fulfillment centers. We’re already planning dozens of locations, with many more to come,” Tom Ward, SVP of customer product for Walmart U.S., wrote in a blog post.
According to Ward, a local fulfillment center (LFC) is “a compact, modular warehouse built within, or added to a store,” and stocked with chilled, frozen, and ambient grocery items as well as merchandise like electronics. In these local fulfillment centers, automated bots gather shelf-stable, refrigerated, and frozen items and deliver those items to a workstation where an associate quickly packs the online order. What’s more, all of this happens out of the view of customers.
While the bots work behind the scenes to pack online orders, associates trained as personal shoppers have more time to carefully select fresh produce, meat, and seafood and retrieve larger general merchandise items from inside the actual store. Once an order is packed, it’s stored until pickup or delivery.
“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,” Ward added.
As Yahoo Finance first reported, Walmart began a local, fulfillment-center pilot in 2019 at a supercenter store in Salem, New Hampshire. At the time, Walmart partnered with Massachusetts-based Alert Innovation to deploy its Alphabot, which uses autonomous mobile carts to gather goods from a high-density storage system.
Ward told Yahoo Finance that the results from that pilot were “really impressive,” pointing to three key benefits from the technology, including more availability for customers, orders that are picked and dispensed at a faster speed, and greater efficiency allowing one local fulfillment center to complete orders for nearby many stores.
In addition to working with Alert Innovation, Walmart will also team up with Dematic and Fabric for the local fulfillment centers. Collectively, they’ll look at different innovations to find what works best in specific environments. According to Ward, some fulfillment centers will be within an existing store, while other stores will see an add-on.
Julia La Roche is a correspondent for Yahoo Finance. Follow her on Twitter.