In 2015, Walmart announced a new omnichannel strategy designed to drive sales growth by strengthening its e-commerce businesses. The main motivator was to get ahead of the e-commerce giant and market disruptor Amazon who is changing retail landscape all over the world.
Walmart’s Plan Was Intended to:
- enhance the omnichannel experience in stores
- optimize supply chain capabilities to lower costs
- build deep digital relationships with customers
As part of the new omnichannel strategy, Walmart looked at click and collect technology providers.
The goal was to find a BOPIS (buy online pickup in store) solution. The solution would ensure smooth and easy customer’s journey from online order to store pick-up. Walmart selected Cleveron’s PackRobot (aka Pickup Tower) solution for a pilot program in 2017. Today, Cleveron solutions are in the Walmart’s click and collect pickup automation program’s roll-out stage.
The Click and Collect Challanges
Walmart’s new omnichannel strategy involved implementing a click and collect solution which would fulfill their vision of engaging consumers and to help save customer’s time and money. Growing e-commerce and parcel volumes presented several challenges that effective click and collect solution would help to solve.
Reducing click and collect pickup operational costs
An effective omnichannel strategy responds to customers expectations of on-demand fulfillment. That requires transforming supply chains and logistics streams from linear to distributed models, essentially turning physical stores into e-commerce fulfillment centers. This offers a substantial reduction in supply chain and logistics costs.
- Reduce in-store storage costs – rapidly growing parcel volumes take up valuable in-store storage space.
- Reduce in-store labor costs – manual click and collect pickup is a labor-intensive service and the costs are increasing with the parcel volume.
Solving the last mile
With click and collect technologies, Walmart can remove the last mile delivery costs by leveraging its fleet of more than 6,700 trucks to deliver products directly from fulfillment centers to its 4,700 stores. This means significant savings on transport costs.
These savings are shared to the customer, continuing its legacy of driving value and cost savings to its customers while providing the ease and convenience.
The Click and Collect Solution
Standing at approximately 16 feet (5 meters) tall and 8 feet (2,5 meters) wide, Walmart has positioned Cleveron’s PackRobots (aka Pickup Tower) at the front of stores, close to checkout. Walmart customers simply choose from millions of items available on Walmart.com and select the “Pickup” option at checkout.
When the item arrives at the local store, an associate loads it into the Pickup Tower, which holds up to 300 items small to medium sized packages. The customer will receive notification via Walmart’s smart phone app or email. When the customer arrives at the store, they step up to the Pickup Tower and scan the bar code sent to their smartphone. They receive their order in less than a minute.
Walmart is also testing Cleveron’s newest solution, CleverFlex. The CleverFlex is also an in-store click and collect pickup automated self-service solution but it is faster than the PackRobot, extendable and can hold from 300 up to 2000 parcels simultaneously.
The Click and Collect Results
According to Forbes, on the battlefield of click and collect pickup, Walmart has a huge advantage over Amazon. And Cleveron’s PackRobots are playing essential role in shifting the advantage into Walmart’s favor.
In Walmart’s omnichannel strategy, the Pickup Towers provide an automated click and collect self-service pickup solution. It helps customers save time and money through fast and easy pickup experience. After the successful pilot, Walmart announced that the Pickup Tower program will be expanded to other locations across the country. Pickup Towers will be available to nearly 40% of the U.S. population by the end of 2018. Additionally, every new Pickup Tower will come with Pickup Lockers, making it possible to also collect larger items.
Substantial savings on costs
Automated click and collect pickup solution PackRobot is 80% more effective than any manual click and collect pickup service.
- The PackRobot holds up to 300 items but has only 5 m² footprint
- Automated self-service pickup reduces parcel handling costs
- In-store click and collect pickup reduces last mile delivery costs
Increased foot traffic and sales
In-store click and collect pickup coverts online traffic to in-store visits. Mark Ibbotson, executive vice president of Central Operations for Walmart U.S. said at the 2018 Shoptalk conference that stores with PackRobots (aka Pickup Towers) experienced an increase in in-store sales.
Recent study on consumer buying trends in 2017 holiday shopping season also showed that 40% of shoppers used click and collect and 90% of them bought additional items once in the store.
Increased customer experience
Mark Ibbotson, executive vice president of Central Operations for Walmart U.S., said at the 2018 Shoptalk conference that the NPS score of the stores with Pickup Towers grew 500 basis points. The NPS score is used as a proxy for gauging the customer’s overall satisfaction with a company’s product or service and the customer’s loyalty to the brand.
More e-commerce revenue
In April 2018, Walmart announced Pickup Discount, a price reduction on eligible, online-only (non-store) items that customers buy online and ship to any Walmart store for pick up (advantage of BOPIS).
Walmart is also predicting strong e-commerce growth of 40% for 2018.
In the race with Amazon
90% of Americans live within 10 miles of a Walmart store, and they serve more than 140 million customers a week. By launching additional omnichannel initiatives aimed at blending its physical and digital channels, Walmart can better leverage its massive brick-and-mortar footprint to compete with Amazon.
Cost savings found through click and collect solutions have also helped Walmart to develop discount programs, like Pickup Discounts, to combat Amazon’s Prime membership model.
Initial feedback about the Walmart Pickup Tower experience has been very positive, with many consumers shocked at the speed of product pickup and ease of use.
- One millennial shopper noted, “I think it’s a great idea for the fast life we’ve evolved to.”
- A Business Insider reporter tested the Pickup Tower and said “Upon retrieving our items, we left the store. It was the easiest and most convenient Walmart experience we’ve ever had.”
Walmart has implemented Cleveron’s PackRobot as well as CleverFlex click and collect pickup automation solutions
Walmart has a custom-made user inteface and we have built-up integration with their backend systems.
- Remote monitoring by Cleveron
- Remote maintenance by Bell & Howell
- On-site maintenance by Bell & Howell
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