On Feb. 20, history was made. It was reported that, for the first time ever, Amazon had surpassed Walmart in quarterly revenue — $187.8 billion to $180.5 billion in the fourth quarter of 2024. Investors immediately took notice and Walmart’s stock dropped nearly 7%. Walmart still led Amazon in annual revenue for 2024, however — $674 billion to Amazon’s $638 billion — as the Bentonville, AR-based Walmart barely kept its title as the world’s biggest retailer.
Some might think that Walmart is starting to lose because its sales are going down, and that its business model is archaic, but Walmart actually has continued to grow year-over-year, with explosive growth over the last three years. In fact, Walmart’s revenues for 2024 were the highest they’ve ever been — 6% higher than in 2023.
So, who would think that in the world of big retail, New Tampa would get something the rest of the nation doesn’t yet have? This “not so secret weapon,” which will be pilot-tested soon, is part of Walmart’s plan to hang onto the #1 spot. Lasers? Robots? Artificial Intelligence? How about all three? Yes, seriously!
New Tampa As Ground Zero?
The New Tampa Walmart on Bruce B. Downs (BBD) Blvd, just south of Wharton High, is a very busy store. Although not the biggest or busiest in the nation, it still serves thousands of customers every day. And, with Walmart desperately trying be the nation’s leader in customer service, how does the New Tampa Walmart store figure into that equation? And, why are the recently installed robotic towers at the New Tampa Walmart still sitting unused (photo above)?
Taking up more than half of the store’s exterior garden center, the large blue “Auto-Dispense Towers” (as they were officially called) have given us a glimpse into the future of the retailer, even if they were slightly ahead of their time. And, these unassuming structures might hold part of the key to Walmart’s continued success nationwide.
If you pull up to the store on the Wharton side, you might wonder, “What in the heck are these things?,” as they remind us of the classic drive-up bank ATM/teller lines, and honestly, that’s not too far off from their actual purpose.
There currently are eight parking spaces under the blue awnings where customers can pull up and park next to individual roll-up doors, get out, walk over to the screen, type in their Walmart order number, and their orders are sent via blue crates on a rail system inside the building (through the thick blue part of the roof), down to the waiting vehicle, where the roll-up door will open, allowing the customer to load their order directly into their vehicle.
This is all supposed to be done automatically by a robotic retrieval system that was called “Alphabot,” working in the 27,000-sq.-ft., back-of-house Market Fulfillment Center (MFC). It was a truly cutting-edge concept that can even handle orders with cold groceries.
But, while the towers, the system, and the fulfillment center were all installed in 2023 and were supposed to be operational for customers by sometime last year, the rollout of the automated system was delayed for reasons unknown, despite multiple in-person inquiries at the store that went unanswered by management for over a year.
We were told it was corporate policy not to talk about the stores, even though management was more than happy to explain the system’s purpose when we wrote our first article about it back in 2023, called “Walmart to Begin Utilizing Robotic Order Fulfillment by Next Year.”
We had heard some rumblings that the wait times for products to be delivered through the system were too long, and that the program was possibly being completely scrapped because the revamped curbside pickup area just worked better.
These rumors didn’t seem too far-fetched, as this was only the 2nd store in the U.S. to get this new technology (in addition to Walmart’s flagship store in Bentonville), so maybe it hadn’t worked as was hoped, and was being abandoned, as was the drone delivery service the New Tampa store was among the first to have back in 2023 that actually was abandoned last year.
What we have found out is that Walmart is not scrapping the automated customer fulfillment program, and that another company contracted by Walmart will be perfecting it for them.
Convenience Above All Else
Convenience has become a big issue for Walmart, since the company believes its customers want and are even willing to pay extra for it, and that this focus will keep the retailer at the top of the retail sector. According to Walmart.com, “Approximately 90% of the US population lives within 10 miles of a Walmart or Sam’s Club,” but as we all know, times are changing and, especially with the growth of Amazon and other home delivery services, customers still want more.
Walmart has been leading the way in customer convenience for years. In 2000, around the time the New Tampa store was breaking ground, Walmart.com was launched, allowing customers to shop online. And, in 2007, the website introduced “Site to Store,” which allowed customers to order online and pick up in-store.
The company also helped pioneer self check-out in the early 2000s, which then became commonplace in Walmart stores in the 2010s. In 2013, curbside pickup was introduced at a Denver location, and added to 1,000 locations by 2017. The New Tampa store has a fully revamped curbside pickup (photo), now with up to 45 numbered spots available on the north side of the store.
Walmart first introduced its big orange in-store pickup towers in 2016, but discontinued them after less than five years. The towers were used to pick up online orders and were partially robotic, operating like a big vending machine at the front of the store.
Today, the company’s most ambitious program, the “Walmart Plus” subscriptions — which are similar to an Amazon Prime membership — are soaring, offering free grocery and product delivery for $12.95 a month, but with an option to have your items delivered within three hours for an extra fee. According to Walmart, the extra fees accounted for a whopping 30% of all Walmart Plus orders. The company has set itself up to offer same-day service to 93% of US households, chief financial officer John David Rainey explained during a recent investor call in February.
“We’re strengthening our ability to serve people how they want to be served in the moment,” chief executive officer Doug McMillon has said, “That’s what’s driving our growth.” And, McMillon is doubling down on the convenience strategy. “If I could change anything about how we’re perceived today, it’d be that more people know about our breadth of assortment online and our increasing delivery speed.”
What About Lasers, Robots & AI?
Although we haven’t had any confirmation from Walmart, part of the reason why the New Tampa store’s automated system isn’t yet operational for customers may have to do with the fact that, on Jan. 16, Walmart announced that it had agreed to sell its “Advanced Systems & Robotics” business, based in Andover, MA (which had been developing the company’s proprietary Alphabot system), to a publicly traded company called Symbotic (NASDAQ stock ticker SYM), for $200 million cash at close, with consideration for $350 million more (or $550 million total), depending upon how much business Walmart does with the company.
Then, Walmart will turn around and pay Symbotic $230 million at close, with another $290 million over time (or $520 million total), as a contractor to install the robotic systems in Walmart stores. Confusing, right?! That’s business!
Since 2022, Walmart has been a big investor in Symbotic and, as of Dec. 2024, the retailer owned 15 million Symbotic shares valued at more than $400 million.
It makes sense that Walmart is heavily invested in Symbotic and paying the company a hefty sum in the deal, because, in the announcement, Symbotic said that, “Walmart has chosen Symbotic to develop, build and deploy an advanced solution leveraging Symbotic’s A.I.-enabled robotics platform to offer Walmart customers greater shopping convenience through accelerated online pickup and delivery options at stores.”
The announcement also said that, as part of the deal, “If performance criteria [for the robotics platform] are achieved, Walmart is committed to purchasing and deploying systems for 400 APDs at stores over a multi-year period, with Walmart’s option to add additional APDs in the coming years.” APD stands for Accelerated Pickup and Delivery centers, which is just a fancy name for the Market Fulfillment Centers (MFC), just like the one that was built in the New Tampa store that isn’t yet available to fill customer orders.
According to this news, since Symbotic acquired the part of Walmart that first developed the robotic technology, one could assume the company will be perfecting the Alphabot technology and deploying it to the New Tampa store when it’s ready, and then construct the system in 400 Walmart stores as part of the initial agreement.
