What small IT teams can take from Walmart’s in-store tech playbook

You don’t need to be a tech-savvy retail giant to act like one, at least when it comes to IT.

At this year’s Walmart Associates Week in Northwest Arkansas, tech took center stage. IT Brew’s walkthrough of a working Walmart Supercenter during the conference not only peeled back the curtain on the tech enabling Walmart associates to serve customers more efficiently, but also highlighted lessons small retailers can borrow from the retail giant’s IT playbook.

Store run. Our June trip to the Walmart Supercenter wasn’t your average grocery run. While there, we heard from Brooks Forrest, VP of associate tools at Walmart, about the rail-based digital shelf labels (DSLs) that allow select stores to update item prices with the touch of a button:

Forrest said DSLs have been implemented in more than 2,300 Walmart stores today, with plans to expand: “We’ll be at Walmart US as a full chain by the end of this year, so it’s a really sizable rollout for this, and we’re really excited about seeing the benefit already.”

Ananda Chakravarty, VP for IDC Retail Insights, told IT Brew that DSLs aren’t “ubiquitous” across the retail industry, but several large retailers use them. One of the benefits of DSLs, he said, is that they can significantly decrease the time needed to reset prices across a store: “When you think about it, a typical employee could take days, if not a week or more, to reset a store price set. And that’s usually done in a manual fashion. You’re printing out these labels. You’re sticking them on the shelves. It’s just a long-term process for a lot of them.”

Bluetooth tags and radio-frequency identification (RFID), a form of wireless tracking technology, are also being used within Walmart stores for inventory tracking and management:

According to IDC, 48.8% of retailers plan on investing in RFID for real-time inventory tracking and item-level visibility within the next two years.

At the Walmart Supercenter’s self-checkout kiosks, we learned how Walmart is using computer vision to make scanning produce a less cumbersome process. According to Walmart VP of Checkout Experience Christyn Keef, about 30% of stores have adopted the tech for this purpose:

Brian Kilcourse, managing partner at retail market intelligence firm RSR Research, told IT Brew that computer vision has typically been leveraged in the retail industry for surveillance purposes: “That’s because there’s a fair amount of shrink—the polite term for theft—that goes through the self-checkout, and it’s a significant enough number that companies like Walmart really want to deal with it.”

Jeff Roberts, CEO of tech strategy guidance company Innovation Vista, told IT Brew Walmart’s implementation of computer vision to better the self-checkout process is “impressive” and speaks to the company’s approach of adopting already proven-technology at scale for commercial purposes.

“Using the cameras, it’s more efficient for the customer, and it reduces the shrinkage risk for the company,” Roberts said. “It’s just a win-win. Great use of AI.”

Not like other stores. Walmart isn’t the only retailer actively pursuing automation initiatives. Chakravarty said automation and AI is top of mind for retailers of all sizes, whether that means implementing the tech in stores to help employees or investing in tools for developers working on the backend.

“Every retailer, from the largest ones—from the Targets and Krogers of the world—all the way down to the small, mid-size groceries are doing the same types of things in terms of, ‘How do we leverage this stuff, put it into our solutions, and make our systems more efficient?’” Chakravarty said.

But, what sets Walmart apart from others, he said, is the breadth of scale and resources the company has to carry out such initiatives.

“They have [Walmart Global Tech]. They have a ton of different types of experimental opportunities that smaller venues just can’t offer. They have specific stores dedicated to testing new technologies on a regular basis, so tons of great opportunities to build and test and try out new types of tech,” Chakravarty said, adding that Walmart also has a strong network of tech talent to execute its vision.

“If you look at their executive teams, the people they bring in are some of the best in the industry, in terms of understanding the technology, as well as understanding the retail space,” he said.

Chakravarty said retailers that may not have the same scale or best-in-class tech talent as Walmart can still implement a lot of the same technology. However, the cost of rolling that tech out to multiple stores will likely prove a hurdle.

“The biggest cost is really mainstreaming it across your entire chain. That’s the hardest part of doing that because the big challenge is really backend data and being able to use that data and access that data in real time,” Chakravarty said. “To do that is not an easy task for smaller retailers.”

However, there is some power in being small.

“Once [rolling out the tech is] done, they don’t have to rebuild that and maintain it in the same way that a Walmart has to,” Chakravarty said. Smaller retailers “don’t have to have strict procedures and rules that go along with it. They don’t have to have regulations that burden them that are more policy-based from a headquarters office.”

Something borrowed. Retail tech experts told IT Brew that Walmart’s automation efforts offer several lessons for smaller retailers. Kilcourse said stores that may not be able to afford a sweeping digital transformation should start off by identifying business areas where they are “leaking money and plug those holes with technology.” He added the willingness to make mistakes is what differentiates “big successful technology-driven companies” from others.

“Remember that when you are failing, get out. Do something different,” Kilcourse said. “That means that you know what success looks like and you know what failure looks like, and you’re not afraid to make a mistake, and learn from it, and move on.”

Roberts added small retailers should prioritize innovations that will really “move the needle” from a cost perspective.

“There are a lot of things that can be implemented in smaller retailers that make no sense for them to do because the costs are such that they don’t have the infrastructure to support it, [or] it creates a whole other sort of hiring need for them to have the skill sets they need that they don’t already have in the building,” Roberts said. “And the gain is not enough to justify all of that, because they don’t have the scale of a Walmart.”

Finally, Chakravarty told IT Brew that not everything a retail giant does is worth copying.

“You don’t want to always copy the big guys just because the big guys are big, and they’re very different from your organization,” Chakravarty said. “A small, mid-size grocer may not have the margins to be able to do all of that. You have to find the places which make the most sense for you and figure out what types of technology can apply in those scenarios.”