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Walmart Tests Driverless Delivery Vehicles

By Daniel B. Kline - Dec 24, 2019 at 8:21AM

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The retailer needs to lower costs (safely) if its same-day grocery delivery is going to make sense.

Walmart (WMT -2.74%) offers same-day grocery delivery in many of its stores. Right now, that's very labor intensive: Human pickers assemble your order, handing it off to a driver, who brings your delivery to your home.

That's an expensive process that has to ultimately be automated. Technology already exists for much of the order-picking process, so it's inevitable that will be adopted, since there's limited risk in automating behind-the-scenes processes.

Automating delivery, however, is more controversial. Driverless vehicles represent a potential danger to the public, and while their adoption may be inevitable, we're still in the very early days of testing the technology.

A driverless vehicle that's being used in the Walmart pilot.

Walmart is testing driverless vehicles. Image source: Walmart.

What is Walmart doing?

The retail giant is conducting a pilot program with Nuro, an autonomous vehicle company. It's a very limited test in the Houston area, and the company hopes to use it to "develop, refine and continue learning how to offer the best end-to-end customer experience," according to a blog post.

Walmart currently offers delivery from more than 1,600 stores. To make that happen, it uses over 50,000 personal shoppers.

"Our unparalleled size and scale have allowed us to steer grocery delivery to the front doors of millions of families and design a road map for the future of the industry," wrote senior vice president Tom Ward in a blog post. "Along the way, we've been test-driving a number of different options for getting groceries from our stores to our customers' front doors through self-driving technology."

It's just a small test, but its importance to Walmart can't be underplayed. Throwing people at same-day delivery and pickup is costing a lot of money. It's not an effective solution for a service that retailers have essentially chosen to provide free or for only a minimal charge.

The problem is that the public has a very high standard for autonomous vehicles. To gain acceptance of cars with no drivers, Walmart (and any other retailer) has to figure out how to essentially make the technology perfect.

Drivers have accidents, and the public accepts that. Autonomous vehicles won't get the same courtesy, and that makes this pilot even more important.

Will Walmart make driverless delivery work?

If Walmart and other retailers are to demonstrate the safety of driverless delivery vehicles, it's not something that will happen quickly, and testing this technology has to move slowly. As long as Walmart can use these vehicles to make deliveries without any disruption, then over time, customers and non-customers will get comfortable seeing autonomous vehicles on the road. 

Automation is inevitable -- the economics of same-day grocery delivery don't work without it. This toe-in-the-water move shows that Walmart understands the potential pushback. Eventually, however, retailers will be using driverless vehicles widely.

But exactly how autonomous vehicles will be used and regulated has not been determined for now. Walmart's pilot will begin to set those parameters, helping lead the way to a future where the roads are filled with driverless vehicles.

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