Desperate To Cut Costs And Increase Efficiency, WalMart Turns To Drones

Tyler Durden's picture

Ever since WalMart decided to increase its minimum wage and then give all employees a 2% pay raise, it has been forced to slash guidance and move forward with mass layoffs in order to cut costs (it had to offset the multi-billion dollar short-term PR investment somehow). The next phase of the cost cutting efforts will now be to replace workers with drones.

At a recent demonstration of how a drone will be utilized in WalMart distribution centers, it was noted that the drones could help catalog in as little as a day what it now takes employees about a month to accomplish.

From the NYT

Walmart, the country’s largest retailer, is testing the use of flying drones to handle inventory at its large warehouses, which supply the thousands of Walmart stores throughout the nation. In six to nine months, the company said, the machines may be used in one or more of its distribution centers.


At a demonstration on Thursday at a dry goods distribution center here, a drone moved up and down an aisle packed nearly to the ceiling with boxes, taking 30 images per second. Shekar Natarajan, the vice president of last mile and emerging science, explained that the machines could help catalog in as little as a day what now takes employees about a month.


Walmart applied to the Federal Aviation Administration for permission to begin testing drones last year.


Walmart workers now manually scan pallets of goods with hand-held scanning devices. The drone’s methodical, vertical movements would essentially mimic the path of a person in a forklift who might be inspecting labels and inventory.


While a Walmart employee may handle the drone, the technology could “potentially” mean fewer workers would be needed to take stock or replace missing items, Lorenzo Lopez, a spokesman, said. Mr. Lopez emphasized that those workers could be deployed in other areas of the warehouse.

Deployed to "other areas" meaning the unemployment office.

As we noted above, the drive to cut costs, despite what the company line may be on it, is driving WalMart to find more efficient ways to do things in order to stay competitive in an already difficult space.

The test is occurring as Walmart is under intense pressure to grow amid an onslaught of low-cost competition, particularly from Amazon, the online shopping giant. Walmart has committed to spending $2.7 billion on labor, technology and other investments, including improving its website and e-commerce business. Last quarter, Walmart beat expectations with $115.9 billion in revenue, but even Doug McMillon, its president and chief executive, acknowledged that the 7 percent growth of Walmart’s e-commerce business was “too slow.”

WalMart operates 190 distribution centers in the United States, and each one services 100 to 150 stores according to the NYT - that's a lot of future cost savings to be had after the drone systems are firmly in place.

As a reminder, if keeping up with Amazon is one of the strategic goals that WalMart has for itself, the company is nearly 3 years behind on the drones.

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HedgeAccordingly's picture

I wonder when amazon wal mart Costco and SAMs club merge. It's the future. Next up, drone based law enforcement surveillance!

cliffynator's picture

Wal-Mart and SAMs are the same company. But anyway, I imagine a future trending toward this:


A Pimp's love is different's picture

Drone Greeters... Welcome to Wal-Mart, I'm Peter Pan.

peddling-fiction's picture

Or stop, hand over the stolen merchandise or I´ll taze you.

Antifaschistische's picture

Why doesn't Wal-Mart and Amazon form an Alliance with USPS in exchange for control over distribution methodologies.   USPS needs to grow up anyway.

PS..Amazon, I'm not a gen-x'er or whatever they are nowdays.  I know how to plan ahead.  I don't need to pay $100 for a membership to get 2 day shipping.  5 day shipping is just fine for me...and Wal-Mart shipping rates are significantly better than yours.

buzzsaw99's picture

they need scanner on a stick

conraddobler's picture

Well I for one hail these heroic meausres for mankind as getting cheaper plastic shit delivered with as little human interaction as possible seems to be the goal of mankind.

Imagine if you will the first apes starting to walk upright all leading to the final moment when NO ONE has a job and cheap shit costs 1 penny and no one can afford that ONE penny.


As we starve to death huddling together with blankets that wear out too soon we can comfort ourselves knowing WE DID IT!

legalize's picture

If you've been paying attention to the level of human interaction that takes place while buying mass-produced merchandise, you will realize that it actually is an improvement in experience to deal with a robot.

RopeADope's picture

You have to get the humans used to seeing drones daily before you can implement Skynet.

Otherwise they tend to get spooked.

FrankieGoesToHollywood's picture

Doesnt matter since there is no where to hide.  Doesnt matter if they are spooked.  Hide in your car? The autopilot will drive you to the solent green factory.  Hide in your house?  The wired-electric meter will report back your activity and autolock you in your own smart-house.  Hide ini your neighbors house?  The culture of report your neighbor as a terrorist on FB is growing. Roam the streets?  the facial recog will provide real-time updates on your position.  Hide in the forest?  The deforestation is taking longer than expected but soon that will be gone too.

GRDguy's picture

Too bad most WalMart workers don't get to visit Bentonville, Arkansas headquarters. They'd see lots of drones there daily.

ZeroPoint's picture

Wal-Mart is TBTF. They have a working 'relationship' with DHS to distribute goods in the case of 'national emergency', which dates back to the Bush years.

A Pimp's love is different's picture

Facial recognition drones in the ammo department (for all those terrorist deer hunters).

rejected's picture

They can save money all they want but their bottom line is a result of sales. And sales come from people spending money. And people get that money from yobs. Firing people eliminates the money that people use to buy, which reduces sales. AND drones / robots don't buy 55 inch TV's.

Over the long term, these businesses are putting themselves out of business.

ptoemmes's picture

They could start with the C-level employees.

Bunga Bunga's picture

hackers, get popcorn ready!

peddling-fiction's picture

Re-route inventory somewhere else.

Kreditanstalt's picture

Who cares?  Walmart is IMO kind of expensive and their product line is of low quality...

silverer's picture

This is great news. Walmart can eventually increase its worker's pay to $60.00 and hour. All 50 of them.

Winston Churchill's picture

I hope the drones get different uniforms so we can tell them apart.

Of course they will have to use the transgender bathrooms on lube breaks.

hooblues's picture

Hope you enjoy you shopping at the Big Box store. Do not shop there, more should do the same. 

To Hell In A Handbasket's picture

We are only witnessing the logical progression of capitalism. Minus the Tricklenomics and to think people once believed, trickle down economics was actually going to happen as advertised. The human race is truly regressing when it comes to intelligence.

carneades_jazz_hands's picture

I like drones, they're fun to play with.  They're also not free, and programming ain't cheap, especially when you scale.  I don't believe the hype about cost savings.


ali-ali-al-qomfri's picture

well shit, that explains it.

All the weddings in Packistan and Afroganistan border had all registered the wedding parties at Walmart and they must have been testing out the new deilvery system software when, out of the blue Skynet bombs them. Case solved.

Grandad Grumps's picture

Got it. I think that Walmart should replace its board and executive committee with drones. What? Too late you say? Well then why are they being paid so much? Drones don't need immense houses, yatchs and private jets.

AsinineBovineFeces's picture

There are very few QA associates in WM distribution centers and considering you need some level of intelligence to do that job they will have no problem transferring jobs. Non-issue. I welcome our robot overlords.

swamp's picture

They are too busy making money building FEMA concentration camps under their Wal Mart Marshall Law "store" front.