This week both Amazon and Walmart were offering up pictures — albeit with very different levels of detail built in — of how the immediate retail future will take shape. Amazon laid out what its decade-long march to fully-automated warehouses will likely look like, while Walmart didn’t offer up a specific plan (or a due date) so much as hint that something “groundbreaking” is coming.
Outside of the previews of the future this week, the world also got a glimpse at what the last few laps in the race for the consumers’ whole paycheck are shaping up to be — with Walmart radically rethinking its employment structure and Amazon launching a freight shipping service that one trade publication called “freight brokers’ and carriers worst nightmare come true.”
It was a full week that was, as always, full of last-minute developments.
Such as ...
Big Play Of The Week: The Automated Warehouse Advancements
The warehouse robots are coming! Soon-ish!
Such was the news out of Seattle HQ this week — Amazon is pushing toward fully automating its warehouses, but won’t be hitting that target until sometime next decade.
According to Scott Anderson, the company’s director of robotics fulfillment, Amazon warehouses will be fully and end-to-end automated at some point in the future — but that point is 10 years away at least.
Anderson’s comments, as reported by Reuters, highlighted that while warehouses are an ideal theoretical environment to deploy the technology, the sort of multiple-function, environment-sensitive machines necessary to do even tasks as simple as identifying an object and picking up it are still in the development and testing phase, as of today.
A robot that can manufacture a microchip and the body of a Tesla motor vehicle is, perhaps counterintuitively, much easier to build that a machine that can replace a human manual laborer. The machines are starting to get there, Anderson noted, but are still largely locked in the research phase. As of today, across 110 warehouses and 45 sorting centers and 50 delivery stations, only a fraction of overall labor is done by robots.
“In the current form, the technology is very limited. The technology is very far from the fully-automated workstation that we would need,” Anderson told Reuters, noting that as of 2019 robots are simply too imprecise to be deployed on factory floors outside very narrow use cases.
However, a decade from now it could be a very different story, he noted, given the pace of advancement in the field.
Brothers In Delivery Arms: Amazon And Ford
The offering will allow delivery drivers to unlock cars and drop packages in the backseat or trunk. The move is the latest in attempts to curb the porch pirating trend that often sees packages disappear from porches and into the criminal ether. It also offers Ford an additional opening as it dips its toes into online commerce.
The news comes as it was reported that eligible members of Amazon’s Prime program can receive products in their garage via a Key Smart Garage Kit. During the Amazon checkout process, customers can choose an “In-Garage delivery” option.
GM of Key by Amazon Rohit Shrivastava said in an announcement for the offering earlier this month, “We know it is important to keep innovating to make delivery as convenient as possible for customers, which is why we’re excited to now have Key for Garage available.” Shrivastava continued, “Today, we are thrilled to open Key by Amazon to millions of Prime members who can now have their Amazon packages delivered securely to their garages.”
The Fight For Freight Dominance: Amazon’s Latest Launch
Reports out this week indicated Amazon’s long-anticipated digital freight brokerage platform, freight.amazon.com, has launched, which invites other firms to “tap into the scale of Amazon as we extend our carrier network to give best-in-class service at great rates.”
The reaction has been dramatic, to say the least. FreightWaves wrote about the launch as a worst-case scenario for freight brokers and carriers because Amazon is “undercutting market prices from 26 to 33 percent” with its new freight endeavor.
“Amazon already moves an enormous amount of freight through its distribution and sortation centers and has an extensive network of trucking carriers,” the report said. “For many industry observers, it was only a matter of time before Amazon leveraged the implicit network effect — the total number of shippers and carriers who do business with Amazon — and connected both sides of its business.”
Morgan Stanley noted that the move was a natural extension of Prime’s move to 1-day shipping announced two weeks ago and a sneaky mechanism for its next great endeavor.
“We see AMZN’s 1-day Prime shipping raising consumer expectations and increasing the cost to compete in eCommerce. Over the long term, we also see this as a Trojan horse for Amazon to grow its next disruptive business … a third party logistics network,” the note read.
And speaking of next big things ...
Big Play Of The Week: Walmart Resets Its Store Management Structure
According to reports out late this week, Walmart is rethinking the staffing scenario at its stores and is testing a program to see if it can have fewer mid-level store managers overseeing workers, in favor of having those workers oversee themselves for increased pay.
The new structure, already active in 75 Walmart locations, is now expanding to 50 new stores over the next 30 days. The new structure focuses on management teams and requires current managers to apply for new roles such as business leads, team leads and academy trainers. The new plan also includes increased training and managerial support for lower-level workers.
Store managers will remain on the top of the structure, with newly created “business leads” ranked under them and “team leads” next in the hierarchy. Business lead salaries will be 10 percent more than assistant store managers currently make and team leads will receive a starting salary of $18 an hour.
The move comes nearly two weeks after Amazon challenged its competitors to raise their employees’ wages.
It seems Walmart was already in the process of accepting said challenge.
Another Streaming Wars Competitor: Vudu Enters The Arena
Walmart has announced that its video-on-demand service, Vudu, will launch 12 original movies and series starting later this year. The new Vudu, apart from adding original material for the first time, will also be adding “shoppable” interactive content, with viewers able to purchase products featured in the shows.
How that will happen remains a little cloudy, though pop-up windows have been mentioned as one possibility being tested.
Walmart also unveiled six shows that are not interactive and are designed to be family-friendly and aimed at middle America.
“We’re not just going to be programming for Williamsburg and Silver Lake,” one executive reportedly noted.
Whether Walmart is a natural fit into the already crowded streaming field remains to be seen — particularly with offerings from both Apple and Disney sitting on the horizon.
Still, as Edward Yruma, an analyst at KeyBanc Capital Markets, pointed out to Bloomberg, Walmart is not without built-in advantages in this arena as well.
“Walmart sells almost 50 percent of all TVs in the U.S., so clearly they have some opportunities to better leverage the purchase.”
Winking At The Future: Walmart’s Answer To 1-Day Shipping
So what does a company do when its main competitor in an unending race for a consumer’s paycheck announced that it is about to make the two-day shipping it set as a standard for consumers obsolete by knocking it down to just one day?
Walmart isn’t saying. But it sure is dropping hints. Well, tweeting hints anyway.
“One-day free shipping...without a membership fee. Now THAT would be groundbreaking. Stay tuned.”
We will. But honestly, we were going to stay tuned anyway. Because the race for the whole paycheck never sleeps. It doesn’t even pause for a nap.
And it looks like it is going to start getting even faster very soon.