Walmart to Test Automated Grocery-Order Fulfillment

An artist rendering of the store extension housing Alphabot.

Someday, maybe someday soon, the idea of going to a supermarket and picking your own items off the shelf will seem outdated -- like taking a ride in a horse and carriage. Walmart (NYSE: WMT) has been attempting to hasten the arrival of that day by pioneering a variety of different ways to allow its customers to order groceries.

You can place online orders to be delivered to your door from some stores. In other cases -- and this appears to be where the retailer sees its biggest growth potential -- customers shop via the app or website, and retrieve their pre-packed orders with a quick trip to the store.

Walmart already offers curbside and in-store pickup options at some of its locations, but for now, customers' orders still have to be assembled entirely by employees. New technology being tested in one of its stores, however, may soon automate some of that process.

Reducing the human element

The retail chain has partnered with a start-up, Alert Innovation to test what the company called "first-of-its-kind automation," according to a blog post written by Central Operations Executive Vice President Mark Ibbotson. Called "Alphabot," it's an automation system that picks items from a storage area so Walmart workers can assemble the order without having to walk through the store or warehouse.

Alphabot, which was developed specifically for Walmart, will be tested at the chain's Salem, New Hampshire, location. It will occupy a 20,000 square-foot addition connected to the store, which has also added dedicated drive-thru pickup lanes.

"When completed, automated mobile carts will retrieve ordered items -- stored warehouse-style in this new space -- then deliver them to our associates at one of four pick stations," Ibbotson wrote. "Our personal shoppers will then pick, assemble and deliver orders to customers. The vast majority of grocery products we offer in-store will be fulfilled through this system, though our personal shoppers will still handpick produce and other fresh items."

Walmart expects to have the Alphabot test up and running by the end of 2018. The company says it also plans to use the technology to offer delivery from the pilot store at an unspecified point in the future.

Walmart's next logical step

The retailer has been testing a variety of ways to make shopping easier, as evidenced by its embrace of omnichannel retailing. It's encouraging its customers to use whatever combination of digital and in-person methods they want.

Its in-store towers, where people can pickup online orders rapidly and without waiting for assistance from a sales associate, have proven a success in their limited rollout so far. When it comes to grocery sales, automating much of the gathering of customers' orders is a logical extension of its curbside pickup and home delivery services. Alphabot, in theory, takes some of the human labor out of the process. That should lower the costs of the services in the long run, albeit after large, upfront investments.

This system being tested in this pilot project may end up being one that Walmart deploys across the entire chain, or at least in many of its locations. It could also prove to be unsuccessful if the tech is too slow, too costly, or simply not efficient enough compared to other alternatives. But even a failure here won't change that inescapable fact that automation is coming to digital grocery orders. Alphabot isn't necessarily the answer, but it's a logical step on the road to taking most of the human labor out of the order-picking process.

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Daniel B. Kline has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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