Retailer to expand use of machines to scan shelves and scrub floors as it seeks to keep labor costs down
Walmart Inc. is expanding its use of robots in stores to help monitor inventory, clean floors and unload trucks, part of the retail giant's efforts to control labor costs as it spends more to raise wages and offer new services, such as online grocery delivery. The major company recently announced that it will be adding this new technology to at least 300 stores this year. Although the new devices have many different features, Walmart mainly wants them to scan shelves for out-of-stock products. After a test in hundreds of stores last year, autonomous floor scrubbers will be deployed in 1,500 stores to assist in speeding up cleaning. On top of that, the number of conveyor belts that automatically scan and sort products as they come off trucks will more than double, to 1,200. Walmart stated "the addition of a single machine can cut a few hours a day of work previously done by a human". Additionally, the technology will allow Walmart to allocate fewer people to complete a task , a large savings when spread around 4,600 U.S. stores. Walmart executives expressed the need for this, as they are focused on providing workers more time to do other tasks, such as hiring in growing areas like e-commerce. Through this process, Walmart is spending to battle Amazon.com Inc. and serve more shoppers buying online. In order to fill recent online orders, Walmart hired around 40,000 store workers to pick groceries from the shelves. Along with the continued hiring, the company is raising wages, adding worker training, and buying e-commerce startups. Last year, a company spokesman explained "store workers spend two to three hours a day driving a floor scrubber through a store, using the manual machines". With the new automatic conveyor belts, the number of workers needed to unload trucks is cut into half, from around 8 to 4 workers. Mark Propes, Senior Director of Central Operations for Walmart US, stated "with automation, we are able to take away some of the tasks that associates don't enjoy doing. At the same time, we continue to open up new jobs in other things in the store." Adjacent to this new technology, around 900 stores will also receive 16-foot-high towers that allow shoppers to pick up online orders without interacting with a human. Brian Corp. produces the software, which powers Walmart's autonomous floor scrubbers. Phil Duffy, vice president of innovation, explained that "the robotic technology is meant to be an "operational partner" and that most maintenance employees spend only part of their shifts cleaning floors, so the autonomous scrubber frees them to do other jobs". Retailers and other companies that hire significant numbers of low-skilled hourly workers are increasingly interested in automation, as higher labor costs are faced, along with an aim to improve retention amid the lowest unemployment in decades. Following a similar move by Walmart last year, Target Corp. added machines to count cash in the backrooms of stores. Last week, Target announced that it would be raising its starting wages to $13 an hour and hinted at the possibility of paying $15 an hour as early as next year. Realizing the impact from the competition, both Costco Wholesale Corp. and Amazon raised their staring wages to $15 an hour. Last year, Walmart raised its starting wages to $11 an hour, however, with the growing competition, is it just a matter of time before we see another raise from another major company? Although hopeful by many, Walmart's executives said at a recent investor conference that the retailing giant "is keeping wages competitive by store and market."
This article relates to the marketing concept because it is explaining not only the external market environment, but also how Walmart is making changes based on its competitors and differentiating itself from those competitors. By focusing on online shoppers, making changes to better fit the e-commerce market, as well as striving to battle Amazon, Walmart is successfully observing its external market environment. With the external market environment in mind, Walmart has made changes to the technology it is using, as well as to its starting wages, which has shown that the company has observed the changes being made by its competitors and has successfully responded. Lastly, with the release of Walmart's new machines to scan shelves and scrub floors, the company is significantly reducing the number of employees needed to complete day-to-day tasks and can focus more on challenging its competitors. Through the use of the new technology, Walmart is differentiating themselves from their competitors, in that they are finding ways to cut costs, which, in turn, could potentially lead them to be positioned above their competition.
I chose this article because I am constantly involved in learning about the new technology that comes on a daily basis to the business world. Having shopped at Walmart many times, I found this article very informative because I had already known about the company's background before reading. Seeing as how we currently live in a society where technology is at the helm of everything people do, it was only a matter of time before something of this nature was created. Walmart, a very successful company, is clearly striving to grow its e-commerce market, while maintaining the current customer traffic in stores. I truly enjoyed learning about the new machines the retailing giant is bringing to the table and I strongly feel that through the increased starting wages, as well as the reduced number of employees needed, Walmart will only continue to move in the positive direction and will able to be called a legitimate competitor to e-commerce giants, such as Amazon.
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