Walmart ramps up in-store automated fulfillment in rivalry with Albertsons, Kroger

Walmart is expanding its successful pilot of store-based, high-tech “local fulfillment centers.”

Initially piloted at a Walmart supercenter in Salem, N.H. in mid-2019, a local fulfillment center (LFC) is a compact, modular warehouse built within or added to a store. The centers can store fresh and frozen items, as well as thousands of other high-volume products. Instead of an associate walking the store to fulfill an order from our shelves, automated bots retrieve the items from within the center. The items are then brought to a picking workstation for fast order assembly.

Albertsons, a major grocery rival of Walmart, is running a similar “micro-fulfillment” center pilot supported by a hyperlocal fulfillment solution from Takeoff Technologies. Leading grocer Kroger is partnering with U.K. online grocery platform Ocado to develop a nationwide network of automated micro-fulfillment “customer fulfillment centers” (CDC), as well as software to automate in-store fulfillment.

While Walmart’s LFC system retrieves a customer delivery or curbside order for assembly, a personal shopper handpicks fresh items like produce, meat and seafood, as well as large general merchandise from the sales floor. Once the order is collected, the system stores it until it’s ready for pickup. 

According to Walmart, the whole process can take just a few minutes from the time the order is placed to the time it’s ready for a customer or delivery driver to collect. Orders can be picked up or delivered within the hour.

Walmart is scaling the number of stores that will also serve as local fulfillment centers and is planning dozens of locations, with more to come. The retailer is building local fulfillment centers with various technology partners, including Alert Innovation, Dematic, and Fabric. With these partners, Walmart will test different orientations and add-on innovations to understand what works best in different environments. 

For example, in some locations, Walmart will add on to its stores. In others, local fulfillment centers will sit inside the existing store footprint. In some stores, Walmart will add automated pickup points that allow customers and delivery drivers to drive up, scan a code, grab their order and go.

“It’s clear that one of Walmart’s competitive advantages is our stores,” said Tom Ward, senior VP of customer product, Walmart U.S., in a corporate blog post. And today, stores are transforming to serve more and more purposes – we’re using them to fill pickup and delivery orders, make Walmart.com deliveries and more. We have a great operation that will serve us well for years to come, but we aren’t stopping there.”