Retailer ends contract with robotics company after seeing similar results from workers grabbing online orders during pandemic
By Sarah Nassauer, The Wall Street Journal // November 2, 2020
Walmart Inc. WMT -1.53% has ended its effort to use roving robots in store aisles to keep track of its inventory, reversing a yearslong push to automate the task with the hulking machines after finding during the coronavirus pandemic that humans can help get similar results.
The retail giant has ended its contract with robotics company Bossa Nova Robotics Inc., with which it joined over the past five years to gradually add six-foot-tall inventory-scanning machines to stores. Walmart had made the robots a frequent topic of conversation at media and investor events in recent years, hoping the technology could help reduce labor costs and increase sales by making sure products are kept in stock.
Walmart ended the partnership because it found different, sometimes simpler solutions that proved just as useful, said people familiar with the situation. As more shoppers flock to online delivery and pickup because of Covid-19 concerns, Walmart has more workers walking the aisles frequently to collect online orders, gleaning new data on inventory problems, said some of these people. The retailer is pursuing ways to use those workers to monitor product amounts and locations, as well as other automation technology, according to the people familiar with the situation.
In addition, Walmart U.S. chief executive John Furner has concerns about how shoppers react to seeing a robot working in a store, said one of these people.
Walmart said in January that the Bossa Nova robots would be in around 1,000 of its 4,700 U.S. stores. Over the past two years the retailer has said it would bring more automation to stores, characterizing the machines as robot “sidekicks” for store workers akin to R2-D2 from the “Star Wars” movies. The Bossa Nova robots were in about 500 stores when the partnership ended, said a Walmart spokeswoman.
“We learned a lot about how technology can assist associates, make jobs easier and provide a better customer experience,” she said. “We will continue testing new technologies and investing in our own processes and apps to best understand and track our inventory and help move products to our shelves as quickly as we can.”
Walmart continues to use other robots in stores, such as floor scrubbers that move through aisles alone.
Bossa Nova laid off around 50% of its staff after the contract with Walmart ended, according to a person familiar with the situation, who said the robotics firm is pivoting toward new clients and software ventures. The venture-capital-backed company was spun out from Carnegie Mellon University’s Robotics Institute in 2005. Walmart told Bossa Nova, “We see an improvement in stores with the robots, but we don’t see enough of an improvement” in revenue and other metrics, said this person.
Retailers benefit from having a more accurate view of their inventory because sales rise when retailers can reduce out-of-stock items, keeping more products available when customers want to buy them. It also can provide a more precise picture of inventory for people who order online for pickup and delivery, services that are becoming more popular during the pandemic.