BENTONVILLE, Ark. -- Wal-Mart has once again upped the ante in its disruption arms race with America’s largest digital retailer, Amazon. And the newest front in the war for shoppers is the sky.
The big-box retailer recently filed a patent for a floating warehouse that makes deliveries via drones. The design bears an undeniable similarity to a patent Amazon was granted in April 2016 for a similar delivery warehouse in the sky.
But the sky is not the only front in this ongoing battle of retail might as Wal-Mart sends in additional reinforcement. Shortly after news broke about Wal-Mart’s plans for floating warehouses, the company announced that it will deliver groceries through a partnership with Uber in Orlando and Dallas starting this week.
Wal-Mart has also partnered with Google to allow customers to make purchases from Wal-Mart through the Google Home smart speaker, a clear answer to the verbal shopping capabilities of the Amazon Echo.
Both of these developments come after Wal-Mart expanded the testing of what it calls Scan & Go technology, which allows shoppers to scan their items as they shop in brick-and-mortar stores so they don’t have to wait in line to check out once their shopping trip is complete.
Here's a closer look at these developments, their implications for Wal-Mart’s competition with Amazon and what the war between these retail behemoths means for convenience stores …
That's no blimp
Wal-Mart’s patent for its flying warehouse describes a machine that seems like something the Empire might land on Hoth to search for Rebels. The aircraft would fly anywhere between 500 and 1,000 feet in the air and contain multiple launch bays from which drones could exit to make deliveries. The aircraft could be piloted remotely or fly autonomously.
As online shopping becomes more widespread, retailers need creative solutions to deliver items to customers as fast as possible while keeping costs low, a task that can be complicated when a company’s warehouse can find itself annoyingly far from some customers.
While a flying warehouse sounds like something out of a science-fiction film, it conceivably could cut costs. And even if it doesn’t end up saving that much time or money, who wouldn’t want to be able to say that their package was delivered by a drone from the Wal-Mart mothership?
Wal-Mart is expanding its grocery delivery service to new markets in Orlando, Fla., and Dallas with Uber. The retailer began delivering groceries in Denver and San Jose, Calif., in 2013, then partnered with Uber more recently to offer grocery delivery in Phoenix and Tampa, Fla.
Judging by a recent blog post from Wal-Mart, the delivery partnership with Uber is one of many tests to see what delivery system works best. “We’ve been testing delivery in a number of ways for a while now in key markets across the country,” the company said. “In some areas, we’re trying general-merchandise deliveries led by associates. In others, we’re testing grocery delivery using Wal-Mart trucks and drivers. We’re working hard to find a way to get you fresh, quality groceries, all while keeping a little more time on your calendar.”
Existing Wal-Mart customers who link their Wal-Mart account to their Google Express account will receive personalized shopping suggestions based off of their online and in-store Wal-Mart purchases starting late September. Wal-Mart items will also be available for purchase directly through the Google Express app.
Additionally, Google Express is doing away with its membership fees of either $10 per month or $95 per year. The service now offers free delivery from all of its participating retailers, as long as the cost of orders are above each retailer’s minimum free-shipping mark.
Neither Google nor Wal-Mart could compete with Amazon on the smart speaker front and the streamlined delivery front simultaneously, so they partnered to do just that.
Wal-Mart is interested in bringing technology to in-store shoppers as well as those receiving deliveries. While Amazon is busy perfecting its sensor-based technology in its Amazon Go c-store, Wal-Mart has expanded testing of its mobile-centric Scan & Go technology. Customers scan their purchases as they shop in-store, confirm with an employee that they actually paid for what they bought and leave; no cash register needed.
The mobile scanning test recently rolled out to more than a dozen stores in Texas, Florida, South Dakota, Arkansas, Georgia and Kentucky. The chain even has handheld scanners available with the same scanning capabilities for customers without smartphones.
Wal-Mart’s Scan & Go technology was first tested in 200 stores about three years ago. A Boston Globe article from 2014 suggests the original tests were unsuccessful because customers did not know how to operate the Scan & Go app.
It’s hard to interpret these tech moves from Wal-Mart as anything other than a direct answer to disruption from Amazon and other online players.
Thankfully, no one is expecting c-stores to release flying retail machines anytime soon, but the high-tech delivery arms race between Wal-Mart and Amazon has the potential to make c-stores a third world country in their retail cold war. Wherever these giants go, the rest of retail is sure to follow. As consumers start to expect this level of technology integration in all of their retail experiences, it will become more important for c-stores to offer the same level of convenience.