Walmart is one of the most popular stores in the U.S., with millions of customers shopping for everything from clothing to home décor to groceries in its 5,000-plus stores throughout the country. And while the mega-retailer seems to be constantly expanding its product offerings and services, the company is now eliminating one major part of its business model in some markets. Read on to discover what changes the big box store is making and find out if your local store is affected.
On Nov. 8, Walmart announced that it would be rolling out driverless trucks to fulfill orders placed through its online grocery business, CNBC reports.
The program, which uses technology developed by tech startup Gatik, is currently operating two driverless trucks 12 hours a day in Bentonville, Arkansas, where Walmart maintains its headquarters. Each day, the trucks complete a seven-mile route between a fulfillment center, where they are packed with groceries, and a Walmart Neighborhood Market location in Bentonville, where the goods are offloaded.
“Through our work with Gatik, we’ve identified that autonomous box trucks offer an efficient, safe and sustainable solution for transporting goods on repeatable routes between our stores,” said Walmart senior vice president Tom Ward in a statement. In Sept., the company had also announced a partnership with Ford Motor Co. and Argo AI to roll out driverless delivery in Miami, Florida; Austin, Texas; and Washington D.C., and had previously announced the development of driverless routes in Scottsdale, Arizona through a partnership with self-driving car company Cruise, Supermarket News reports.
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The driverless technology now being used by Walmart could potentially save the big box store—and companies like it—millions of dollars annually, insiders say.
“Taking the driver out is the holy grail of this technology,” Gautam Narang, CEO of Gatik, told CNBC. According to Gatik, moving to a driverless model could reduce logistics costs for grocery chains by up to 30 percent.
With high demand for workers across multiple industries, Walmart has been rolling out incentives to help attract employees. In Sept., CNN Business reported that the big box store was hiring 20,000 full-time and part-time workers for jobs in its fulfillment and distribution centers. In Nov., The New York Times reported that the company was offering workers starting salaries as high as $17, as well as the promise of free college tuition to attract talent.
However, one aspect of the company’s supply chain woes may be mitigated by the driverless truck program, insiders say. “This solution is very relevant across different supply chains, different kinds of logistics,” Narang told CNBC. “It’s not just about the labor shortage. It’s all about increasing efficiency, helping with the operating costs.”
Walmart isn’t the only chain that’s hoping to lower costs and increase sales with a move to a driverless model, however.
In 2019, Kroger announced that had partnered with robotics company Nuro to launch a driverless delivery program in Houston and has since become one of the company’s primary investors, recently contributing to Nuro’s latest $600 million investment round.
In March 2021, Albertsons Companies, which owns grocery chains Albertsons, Acme, Balducci’s, Carrs, Haggen, Jewel-Osco, Kings Food Markets, Pavilions, Randalls, Safeway, Shaw’s, Star Market, Tom Thumb, United Supermarkets, and Vons, announced the rollout of its own pilot driverless program in Northern California, with products delivered to customers via an emission-free delivery cart.