We look at how Walmart is using self-driving vehicles to transfer customer orders between stores to support its online grocery initiative.

Partnering with Gatik

Walmart has partnered with autonomous vehicle company, Gatik, for the pilot which is taking place in Bentonville, Arkansas. Walmart has been working to support new legislation in the state which allows for autonomous vehicles to operate. We visited the pilot store for this programme in June, with Walmart providing the IGD team with an opportunity to see the vehicles in action. The pilot further reinforces the way in which Walmart is at the forefront of adopting new technologies into its operations, to drive customer and operational benefits.

Transferring products between stores

The vehicles are being used to move products between stores on a two-mile route in Bentonville. Orders are picked and stored within its Supercenter hypermarket format and moved to a smaller format Neighborhood Market store, where the orders are picked up by customers. This type of product transfer is often referred to as the ‘middle-mile’. This model is easier to test autonomous vehicles because it is a planned, known and regular driving route. Walmart will focus on learning more about the logistics of introducing this additional transport mode, the impact on operations and understanding how else the technology can be used.

Improving the economics of grocery ecommerce

Self-driving vehicles could be an important component in improving the economics of grocery ecommerce. Last-mile delivery represent a significant proportion of overall costs. Earlier this year, Kroger expanded its autonomous grocery delivery service to Houston, following an earlier test in Scottsdale, Arizona. Retailers in North America are currently testing several fulfillment and delivery models as they look to reduce channel costs. These include hyper-local robotic fulfillment, third-party crowd-sourced delivery platforms and shared centralised distribution models.