Wal-Mart making pickup self-serve

Gizmo like a giant ATM

Justin Wright, department manager for pickup at a Wal-Mart Supercenter in Rogers, demonstrates how a 16-foot tower distribution system works. The dispensing device is being tested at the Northwest Arkansas store.
Justin Wright, department manager for pickup at a Wal-Mart Supercenter in Rogers, demonstrates how a 16-foot tower distribution system works. The dispensing device is being tested at the Northwest Arkansas store.

ROGERS -- Plenty of new technology has been tested and implemented by Wal-Mart Stores Inc. throughout Justin Wright's nine years as an employee.

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NWA Democrat-Gazette

Part of the ceiling of the Wal-Mart Supercenter in Rogers had to be removed to install this 16-foot-high distribution station. Customers who order online can pick up their merchandise from the dispensing machine.

But Wright, who is the pickup department manager of the Wal-Mart Supercenter in Rogers, has never worked with anything quite like the enormous orange tower now located at the front of his store.

"This is probably the coolest thing we've done," Wright said.

Wright is playing an integral role in one of Wal-Mart's latest experiments, overseeing a 16-foot-tall tower that serves as a distribution station for online orders being picked up in the store by customers. The automated pickup machine was produced by Estonia-based startup Cleveron and installed nearly two months ago at the retailer's Rogers location, beginning a testing phase in which Wal-Mart plans to gather feedback from customers about its speed and convenience.

The tower was designed to work much like an ATM or vending machine for customers who have ordered general merchandise online. Shoppers enter their name into a kiosk next to the machine and receive an order number. They scan the receipt at the machine and the product is dispensed.

The machine can hold up to 300 packages, which can be as big as 24 inches high or 30 inches long. Larger packages must be delivered by employees, but Wright said so far about 80 percent of the store's pickup orders are small enough to be stored in the machine.

There is one catch: the device is not yet fully automated. A Wal-Mart employee must help customers collect their packages for now, but Wright said the process should become fully customer interfacing by the end of the year and improve a wait time that already has been significant reduced.

"Nationally, our pickup wait times were about 10 to 15 minutes," Wright said. "When they first put it in, I got it down to about 7 or 8 minutes. I think we're at 6 ½ right now."

Developing services that improve the speed and convenience of shopping is key for retailers such as Wal-Mart, which wants to stand out in a competitive retail landscape.

Wal-Mart has come up with plenty of ideas like its grocery pickup service, where customers order groceries online, drive to the store and have them brought out to their cars by employees. It continues to test a subscription-based ShippingPass service, the retailer's answer to Amazon Prime. And Wal-Mart also announced last summer it was partnering with ride-hailing services Uber and Lyft to conduct limited grocery delivery service tests in Denver and Phoenix.

Carol Spieckerman, a retail consultant and president of Spieckerman Retail, said the pickup tower in Rogers is another example of Wal-Mart leveraging its physical locations as a testing ground for innovations that are ultimately beneficial to the retailer's omnichannel business.

"Walmart realized much sooner than many of its competitors that going forward, retail will be about presenting choices and options, not attempting to curtail them," Spieckerman said in an email. "That means that some customers may find the Rogers pickup machine convenient while others prefer home delivery or browsing through the store, and those preferences may change depending on the category being shopped, the time of day or any number of other factors."

Annibal Sodero, an assistant professor at the University of Arkansas Sam M. Walton College of Business, believes the pickup tower could provide an important potential final-mile solution, as well.

He said the final mile -- or last leg of product delivery -- is expensive, representing about 30 percent of total logistics costs. Innovations such as the automated pickup tower could help Wal-Mart trim some of those costs by driving customers to the store to collect their orders.

"This makes the delivery much less expensive because the truck is going to the store," Sodero said. "It's going to replenish the store. So why not bring an extra box or an extra unit just to be placed in the vending machine?"

It took about two weeks for Cleveron representatives to install the machine in the Rogers store. It took some creativity because tower was too tall to fit inside. So part of the store's ceiling was removed to accommodate the machine.

Wright said the orange tower draws plenty of curious looks from customers and Wal-Mart executives, who have dropped by the store to take a look at the new toy.

"I've actually met more people higher up in Wal-Mart this year than I have in the nine years I've worked here," Wright said.

Wal-Mart has no current plans to have additional pickup towers installed in other stores because it remains in the early stages of testing in Rogers. But Wright said the feedback so far has been promising and there should be plenty of opportunities to test the service during the busy holiday season.

Wal-Mart said late last month it was expanding the number of items available through its same-day pickup services for the holidays. The retailer said it receives up to five times as many same-day pickup orders during the holidays compared with a normal week and was dedicating more employees to help customers who are collecting those online orders at the stores.

"We know speed and convenience are important to our customers and we're always looking for new ways to bring it to them," Wal-Mart spokesman Kory Lundberg said in an emailed statement. "We are excited to be one of the first companies to test this new technology and are looking forward to hearing feedback from our customers and associates."

SundayMonday Business on 11/13/2016

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