Dive Brief:
- Walmart is selling its advanced systems and robotics business to Symbotic to improve online order pickup and delivery fulfillment, according to a Jan. 16 press release.
- Under a development agreement, Symbotic will build and develop an AI-enabled robotics platform to automate accelerated pickup and delivery centers (APDs) for the retailer, per the release.
- Walmart will invest $520 million to fund the development program and purchase and deploy 400 APDs from Symbotic over a multi-year period, with the option of adding more, the release said.
Dive Insight:
Walmart is offloading its robotics business to a technology partner to accelerate automation technology development for its fulfillment operations.
Symbotic has partnered with Walmart to automate the retailer’s supply chain since 2017, per the release. The technology company is currently deploying its software and robotics platform at Walmart’s 42 regional distribution centers in the U.S.
“We anticipate the synergy between Symbotic’s expertise and our nearly decade-long relationship in innovating the supply chain technologies to elevate customer service and rapidly advance our in-store Accelerated Pickup and Delivery capabilities,” said Greg Cathey, SVP of transformation and innovation at Walmart, in the release.
The agreement between Walmart and Symbotic has a 12-year term, according to a Jan. 15 securities filing. The technology Symbotic develops for Walmart during that time will be exclusive to the retailer. However, the company expects to offer the technology to the entire retail market once that exclusivity window fades, Symbotic CFO Carol Hibbard said on a Jan. 16 conference call.
For the ADPs, Walmart will use a miniaturized automation system in the back room of stores to retrieve products to fill individual customer orders for pickup or last-mile delivery, said Bill Boyd, chief strategy officer at Symbotic, on the conference call.
Walmart’s drive to scale the use of automation has been a major theme of its supply chain evolution in the last decade.
In 2024 alone, the company automated distribution centers in Arizona and Arkansas and announced plans to add five new automated distribution centers to its grocery supply chain. It also began using autonomous forklifts at four distribution centers in Florida, Texas, New York and Alabama.
By the end of this year, the retailer expects 65% of its stores to receive merchandise from high-tech distribution centers, according to an October email to sister publication Supply Chain Dive.
Continued reliance on automation technology appears to be paying off in terms of delivery efficiency for the retail giant. Walmart cut U.S. net delivery costs per order by 40% in its most recent fiscal quarter.
Walmart EVP and CFO John David Rainey identified “the automation of our supply chain” as one of the key factors driving the improvement, per a Nov. 19 earnings call.
