Apr 6, 2023 - Economy & Business

Walmart defines timeline for automation push

Illustration of a warehouse worker casting a shadow of a robot

Illustration: Sarah Grillo/Axios

Walmart's plans for automating chunks of its supply chain are coming into focus.

Why it matters: E-commerce is one of the fastest-growing parts of Walmart’s business, and having positive experiences with delivery is a key driver of customer loyalty.

Driving the news: The company this week laid out a timeline for realizing the benefits of its $14 billion-plus automation investments during its investment community meeting.

  • Walmart expects that by early 2026, 65% of its 4,700 U.S. stores will be able to receive products from 42 regional distribution centers that are being retrofitted with automation over the next several years, a spokesperson confirmed to Axios.
  • Additionally, about 55% of the products that move through the company's fulfillment centers will be handled through 35 sites, including four new automated facilities announced last June — lowering unit cost averages by about 20%, John David Rainey, Walmart’s CFO, said during a presentation.

What they’re saying: “Automation enables us to improve our throughput at lower cost and to change how our associates work in new and better ways,” said Rainey.

  • “Most notably, it allows us to reallocate labor hours closer to the customer to improve both the customer and associate experience.”

Our thought bubble: Jobs related to picking, packing, sorting and stocking will likely be impacted, whereas customer-facing jobs will likely remain intact.

What to watch: Talking up its logistics power will enable Walmart to compete more aggressively with Amazon in other ways as well, including selling delivery as a service to paying merchants.

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Editor's note: This story has been updated after Walmart clarified the number of distribution centers and fulfillment centers that will be updated.

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