Autonomous vehicles are self-driving but require a human in the driver seat of the car but Walmart decided to skip autonomous vehicles jumping straight to driverless trucks. Walmart announced they are working on a fleet of driverless trucks that will help make more deliveries and increase efficiency for deliveries.
Last year Walmart generated $208 billion in sales in groceries, and they will be investing these profits towards the future of the U.S. retailer. Walmart has the goal to gain market share by utilizing a unique fleet of autonomous driverless trucks to help fulfill online grocery orders.
Walmart created the new test vehicle in partnership with Gadik, a startup company focusing on the “middle mile” which is the transport of goods within a supply chain that is routed from a warehouse to a fulfillment center or retailer. These gas-powered trucks operate 12 hours per day and are loaded at the warehouses (or dark stores) then travel to Walmart’s Neighborhood Market locations, then the goods are unloaded, and the trucks go back for a seven-mile round trip.
The trajectory of this project is improving efficiency while Walmart is transitioning into a “hub and spoke” model operating at smaller warehouses located closer to customers that require more restocking. The founder and CEO of Gadik, Gautam Narang, attests that autonomous technology will become more in demand as more retailers start following this trend.
The idea behind the project relies on a simple model as the number of trips and routes increases exponentially. To make this venture profitable a shifting of the scales is required using an autonomous solution such as Gadik’s. The grocery business traditionally has a very thin margin of 2% to 4% and other retailers are testing out similar developments to improve business. Walmart claims this move towards autonomous delivery trucks isn’t to cut costs and is more about increasing capacity while allowing associates to spend more time assisting in-person customers. Walmart’s customer service model will also be changing along with this development to improve the quality of customer service and wants associates to have higher-level functions compared to their current job role. Other chains have admitted developing more tech-related programs are cost-cutting measures and it seems Walmart is wanting to improve the customer shopping experience.
