What is bright orange, 16 feet tall, and improves the Walmart shopping experience?
It’s the pickup tower, being installed in hundreds of locations across the country.
Shoppers order merchandise online and pick it up in a giant vending machine located at the front of the Walmart store by simply scanning a bar code from their phone. If the merchandise was available in the store, customers can pick items up about an hour after ordering. If the items are being shipped, customers get an estimate of when they will be ready. The service is free, and can be used for relatively smaller items. A row of lockers located next to the vending machine can handle medium-sized items as well.
Video Spotlight: Walmart Pickup Tower AKA Giant Vending Machine: How Does It Work???
This post is based on the Greater Fort Wayne Business Weekly article, Walmart introduces new pickup tower, by Steve Garbacz, March 28, 2019, and the YouTube video, Walmart Pickup Tower AKA Giant Vending Machine: How Does It Work???, by Rich DeMuro, August 15, 2018. Image source: Design Pics / Kristy-Anne Glubish
1. What core competencies does Walmart have that play into this new pickup tower idea?
Guidance: Walmart has many locations as part of its strategy to be conveniently located for customers. It is trying to leverage this asset of many store locations to compete and retain share against Amazon. By using stores for order pickup, Walmart offers something that Amazon can’t.
2. How might the Walmart pickup tower affect the company’s profits and costs?
Guidance: Walmart hopes that new, added conveniences will increase overall revenue by encouraging customers to shop at their stores, rather than shopping at Amazon or other bricks-and-mortar retailers.
Also, by bringing people into the stores to pick up online orders, rather shipping to individual homes, customers might shop and buy other merchandise as well.
The cost associated with having employees pick the orders and load the vending machines are an added expense, as are the installation and maintenance of the pickup towers. However, time and labor costs are saved by not having customers interact with pickup counter employees or cashiers at the registers.
3. What other supply chain come into play with the new pickup towers?
Guidance: The ongoing trucker shortage coupled with increasing fuel costs have led to higher transportation costs. Finding ways to get the product to customers that avoid needing to drive the packages to many individual homes is an important tactic. In addition, Walmart can save on packaging, as the need for cardboard boxes and other materials is lowered when customers are picking items up in the stores instead of having products delivered to their homes.