Big-box retail is getting a refresh for 2020, at least in some parts.
Take Costco. The big-box membership retail store saw its sales continuously rise throughout the holiday season, according to a report by The Wall Street Journal. The news is especially noteworthy because unlike its competitors like Walmart and Target, Costco has actually reduced spending on its eCommerce offerings, something that has been a revenue bright spot for other companies. The company instead encourages its shoppers to actually come into its stores, saying that its sales growth is robust enough without an order online, pick up in-store option.
“As it relates to buy online and pick up in-store, we continue to look at what others do and continue to scratch our head,” said Costco Financial Officer Richard Galanti. “We’re not at a point that we’re planning to do anything with that.”
That’s not all.
Target last year also affirmed that while it will continue to advance and develop its physical stores and the consumer’s experience within them, those experiences will be increasingly integrated digitally. Brick-and-mortar shopping isn’t going away, Target Chief Operating Officer John Mulligan said, but “inferior brick-and-mortar experiences” are certainly an endangered species in the modern retail environment. “That’s why we’re investing heavily both in our store assets and in the experience our team provides,” he said.
Other innovations are taking place, including at Walmart.
The retailer is aiming to solidify its position as America’s largest grocer with a grocery-picking robot called Alphabot that is said to pick, pack and deliver orders fast, the company announced earlier this month.
Automated grocery systems like Alphabot can reportedly pick and pack orders an estimated 10 times faster than a person, which could increase order capacity as demand grows for online grocery services.
Alphabot, which was developed solely for Walmart by startup Alert Innovation, uses autonomous carts to pick orders for groceries purchased online. A Walmart associate then checks, bags and delivers the final orders. The technology was secretly being piloted at a Supercenter in Salem, New Hampshire, which will serve as Alphabot’s home base. The system will repeatedly be analyzed for improvements before launching nationwide.
“By assembling and delivering orders to associates, Alphabot is streamlining the order process, allowing associates to do their jobs with greater speed and efficiency,” said Brian Roth, senior manager of pickup automation and digital operations for Walmart U.S.
Roth believes Alphabot could inherently transform Walmart’s eGrocery enterprise and “free associates to focus on service and selling, while the technology handles the more mundane, repeatable tasks.”
Supermarket sales make up 56 percent of Walmart’s total U.S. revenue, but the grocery space is becoming crowded, with increased competition from Amazon, Costco, Kroger and others looking to tap into online food shopping.
“This is going to be a transformative impact to Walmart’s supply chain,” Roth said. “Alphabot is what we think of as micro-fulfillment – an inventive merger of eCommerce and brick-and-mortar methods.”
The system uses fully autonomous bots that operate on three axes of motion, with the ability to move items horizontally and vertically without lifts or conveyors. Alphabot also continually shares order information, and as its learning advances, “stocking will get more intelligent,” said Roth. “We never want to be in a position to tell an online grocery customer they can’t have an item,” he said. “We’ll be able to look at datasets and fairly say, ‘these two brands of pasta are typically bought together,’ or ‘here’s an item a consumer buys often,’ and use that information to make more informed substitutions.”
To better compete with Amazon, Walmart started revamping its produce department in November in a project called Produce 2.0. With 95 percent of shoppers preferring to buy produce in-store, the department is an important one for retailers.
Big-box retail sometimes works hand-in-hand with eCommerce, and other times it blazes its own path. But providing a better consumer experience, no matter the method, would seem to be vital for this type of retail success.