For months, FreightWaves has covered Walmart’s competition with Amazon over the future of retail—from Walmart’s acquisition of same-day delivery service Parcel to the behemoths’ battle over trucking capacity and Walmart’s explosive digital sales growth, this is a war with multiple fronts. Much of Walmart’s adjustments to its business, and the reason why its competitors like Target are seeing their value evaporate, has to do with ‘the Amazon effect’, i.e. the heightened expectations consumers have for rapid delivery at low cost.
Now Walmart is trying to leapfrog Amazon’s game-changing Prime service and experimental drone delivery programs by stocking inventory directly in customers’ homes. A patent Walmart filed back in June was just published on November 30 describes an ‘unattended retail storefront’ that would be accessible from inside a residence and loaded by an ‘unmanned motorized transport unit’ outside the residence. Products for sale would be displayed to customers inside their own homes, eliminating the delay between the initiation of a sale and the delivery of a product.
The storage space could include a refrigerated area at temperatures either below or above freezing and various sensors including weight sensors, ultrasonic transponders, camera-based components, radio-frequency identification (RFID)-tag readers, etc. The inventory in the walk-in sized retail storefront could be selected by the customer, standardized by Walmart based on demographic data, or determined by an algorithm that would analyze a customer’s previous purchases at a brick and mortar Walmart store, online, or at the unmanned retail storefront. Consumers could also return unused items by putting them back on the shelves.
“Assuming appropriate stocking of the unattended retail storefront, [this product] can greatly improve the consumer experience to a point where ‘shopping’ is very nearly a completely transparent process that requires almost no shopping or delivery time in and of itself,” Walmart wrote in the patent application.
Walmart has already started re-conceiving its big box stores as warehouse fulfillment centers—if you go into a Walmart store today, you’ll see blue-shirted pickers loading plastic bins with items ordered online which will then be picked up by customers. This patent, even if it is never commercialized, demonstrates Walmart’s continuing commitment to decentralizing its inventory and bringing products ever closer to its customers. This latest unattended retail storefront patent follows a similar concept Walmart patented last fall—using the Internet of Things (IoT) to track products in customer’s homes and auto-order replenishment products.
Amazon has already made moves to get inside consumers’ homes: in October the e-commerce giant announced Amazon Key, which will allow delivery drivers to make secure deliveries inside a residence. The service provides customers with a security camera and a smart lock. Walmart is experimenting with a similar delivery service, mostly for groceries, through its partnership with startup Deliv.
“Five to 10 years ago, that final touch of a package in a distribution center happened many, many miles from the customer, often in another state. Retailers and shippers previously had many more days, even weeks, to deliver an order,” CBRE Head of Industrial & Logistics Research David Egan said. “That window now is down to a single day, sometimes just a few hours. That's why that final touch now needs to be only a few miles from most customers.” The drive toward denser last mile delivery networks has sent demand for New Jersey warehouse space skyrocketing and industrial building rents to record highs.
It’s getting more and more expensive to move those distribution facilities closer to population centers in the country’s urban cores. Walmart’s inventory-at-your-house patent represents only one possible solution—another one could be repurposing obsolete department stores in aging, but centrally located shopping malls. In 2015 Rooker Development in Atlanta razed an old shopping mall and turned the site into a nearly 1M square foot distribution hub, ultimately leasing it to Excel Logistics.
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