Walmart’s Eyeing Up Automation Ahead

Walmart’s Eyeing Up Automation Ahead

8 months ago2 mins

Walmart’s counting on automation to give it a competitive edge.

What does this mean?

Walmart's same old financial outlook might not have lit up investors' eyes this week, but the retail giant's got a long-term ace up its sleeve: automation. See, Walmart's US operating income has been stuck in a rut for the past ten years – partly due to the rise of e-commerce, which often costs more to manage than in-store sales. And now Walmart thinks it’s found a solution, getting a little robotic aid to help cut costs and revitalize its supply chain.

Walmart operating income
Source: Statista

Think self-driving forklifts that do the heavy lifting, lightning-fast customer demand response, and snazzy, efficient storage solutions. And that’s not some distant reality: it’s already happening. Automated distribution centers will cater to a third of Walmart's stores by the end of the year – and within three years, the company thinks automation could slash the cost of moving goods by 20%.

Walmart investment
Source: Bloomberg

Why should I care?

The bigger picture: The patience of Job(s).

Walmart's robo-revolution isn't just about wowing Wall Street: it's poised to shake up the job market too. The world's top retailer has been trimming jobs in fulfillment centers – and while some supply chain roles may grow as sales volumes do, the net effect is still going to be job loss. So watch this space: if other retailers end up following suit, it just might change the jobs market as we know it.

Zooming out: Don’t go full Luddite yet.

We’ve said it before: these developments aren’t guaranteed to be for the worse. The rise of automation could also spawn entirely new jobs, and it could make our lives easier too. One Nobel Prize-winning labor economist has suggested that the AI revolution could supercharge productivity, leading to more leisure time and maybe even a four-day work week. Here’s hoping.

Finimize

BECOME A SMARTER INVESTOR

All the daily investing news and insights you need in one subscription.

Learn More

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

Finimize
© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG