U.S. retail giant Walmart (WMT) has accelerated the use of automation in its business to cut costs and speed up delivery of products into its stores.
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As reported by the Financial Times, Walmart is planning to use sensors to track the location and condition of 90 million pallets of groceries it ships to stores every year.
Bluetooth Connections
It is understood that Walmart will attach the sensors to the pallets in every one of its 4,600 stores in the U.S. by the end of 2026.
The move, which will see Walmart work with supply chain technology vendor Wiliot, will aim to reduce routine work at Walmart stores.
The devices are embedded in shipping labels stuck to items trucked from warehouse to stores. The sensors use Bluetooth connections to send data about the condition of pallets and their location. They replace manual checks by employees using that old technological device – pen and paper.
Greg Cathey, Walmart’s senior vice president of transformation and innovation, said the technology would tackle “one of the hardest problems in retail – knowing exactly what we own and where it is at any given moment.”
The fear of many an employee is that automation will end up in them losing their jobs, but the experience at Walmart suggests otherwise. It has ramped up its revenues by $150 billion in the last 5 years without taking on additional staff. It employs around 1.6 million people in the U.S.
AI Direction
Indeed, earlier this week Doug McMillon, chief executive of Walmart, which has repeatedly introduced AI tools into its own business over the last few months, said that the innovative new tech would scrap some jobs and tasks in the group, but also introduce new ones. Overall, it means that the group’s headcount of around 2.1 million worldwide will remain stable over the next three years, despite expectations of higher sales and revenue growth.
The hope is that the devices will help the group cut costs and improve service as Walmart fights off competition from other value retailers such as Costco (COST).
Although, it is already doing fairly well this year when compared to its peers. – see above.
The group is also becoming more embedded with AI. U.S. store and office-based Walmart staff will soon have access to “cutting-edge AI training” through a new collaboration with tech group OpenAI. That means getting hands-on experience with AI tools.
Its other AI developments include the launch earlier this year of a new GenAI-powered shopping assistant called Sparky. It helps answer product questions from customers and compares options.
It also has internal AI tools such as Wally, which analyzes performance across products, channels and markets for buying merchants to more effectively diagnose stock performance.
Is WMT a Good Stock to Buy Now?
On TipRanks, WMT has a Strong Buy consensus based on 29 Buy ratings. Its highest price target is $129. WMT stock’s consensus price target is $114.89, implying a 12.20% upside.
