Walmart: Growing Market Share Through Automation

Walmart is undoubtedly the largest, most affordable retailer and is now leading efforts to successfully expand its grocery department. Below are two ways how Walmart is adopting emerging market trends to maintain its market share and expand its produce department:

1. Delivery

After seeing how much people prefer home delivery over in-store purchases, Walmart began offering same-day delivery in some areas to retain customers who had once comprised their retail sales. They even piloted a smart lock partnership to enable deliverymen to unpack groceries into customers’ refrigerators when they are not home, competing with services offered by Amazon after they acquired smart lock company, Ring. 

Its closest competitor Target’s last-mile initiatives have been a success as their stock has increased 20% in 2018. At the end of 2017, Target acquired Shipt for $550 million which enabled it to compete with Amazon and Walmart in the grocery delivery space. Shipt employs personal shoppers for customers. They even send texts to customers if items are out of stock and when they are en route to deliver, similar to Walmart’s Jetblack delivery platform. Target’s other delivery systems are Target Restock, Drive Up and the fulfillment of online orders within stores. Target Restock offers a similar functionality as Amazon Pantry, customers can order about 45 pounds of essential, everyday products. Drive Up is a curbside pickup service, somewhat like a drive-through system. Chicago will be a battleground between the retail giants as it is the first city to have all four of Target’s new delivery services and home to the next Amazon Go store.

2. Verticalization/Automated Farms

Walmart is also following the trend of verticalization because controlling their own, complete food supply chain will reduce costs, improve crop yield management, and accelerate their move toward natural, sustainable foods. The company has filed for patents on machine vision, drones, and a “robot bee.” Crop management will rely on machine vision to identify sick crops and those plagued by insects. Subsequently, drones will deploy the appropriate chemical or non-chemical treatment. Automated farm management will also reduce long-term labor costs and protect crops better than current deterrents. 

The patents will even replace natural functionalities of farming. Decreasing bee populations has become a large concern for farmers since they rely on the insect to pollinate crops. In fact, the issue has become so prevalent that actor Morgan Freeman turned his 124-acre Mississippi ranch into a bee sanctuary. Walmart won’t be following Freeman’s steps, but their “applicators” will spread pollen from one plant to another and use sensors to verify that the transfer was successful, replacing bees' most essential function.

Johnny Kobori