Walmart is increasingly phasing out automated pick-up towers erected in more than 1,500 stores. A new report by the Wall Street Journal (WSJ) indicates that the retailer is turning to curbside pick-up service to dispense online orders.
Walmart (WMT) has reportedly resorted to using more visible automation services in the aftermath of the pandemic. The Wall Street Journal report claims that the retailer has removed or turned off the 17-foot tall machines placed in front of its stores over the past year. With about 300 machines being removed from stores, the company is also in the process of hibernating close to 1,300 machines.
In recent years, the pick-up towers have acted as pick-up spots for online orders. The nation’s largest retailer appears to be changing tactics with curbside pick-up service becoming more effective and reliable. As shoppers get more items curbside or delivered, Walmart has to find new ways to use its pick-up towers.
In the aftermath of the pandemic, consumers’ shopping patterns have changed significantly. Walmart has had to adapt by expanding its online grocery curbside pick-up and home delivery business. The service is more appealing as consumers opt for offerings that can deliver items to their doorstep.
The retailer shunning pick-up machines presents a potential problem for Cleveron, the Estonia-based technology company supplying them.
“We can’t comment on our clients’ business operations but can say that our cooperation with Walmart remains ongoing in other areas,” said a spokeswoman for Cleveron in the WSJ report.
Walmart shares are down by 3.1% year-to-date after a 21% pop in 2020. (See Walmart stock analysis on TipRanks).
Guggenheim analyst Robert Drbul reiterated a Buy rating on Walmart stock buoyed by the retailer’s plans to accelerate investments in alternative revenue streams. According to the analyst, the company is well-positioned to ramp up investments in fulfillment capacity, supply chain technology, and automation.
“We believe these investments should better position the company to respond to shifts in customer behavior and help maintain market share gains realized during the pandemic. Walmart has shifted its focus more on e-commerce and the blending of physical/digital assets, as well as driving U.S,” Drbul wrote in a research note to investors.
Drbul has a $160 price target on WMT, implying 14.5% upside potential to current levels.
Overall, consensus on Wall Street is that Walmart is a Strong Buy based on 10 Buys, 3 Holds, and 1 Sell ratings. The average analyst price target of $161.83 implies 15.8% upside potential to current levels.
WMT scores a 7 out of 10 on TipRanks’ Smart Score rating system, implying its performance is expected to meet market expectations.
Related News
Biogen Revenue Drops 24% In 1Q; Shares Plunge 4%
JetBlue Expanding To New York And Chicago As Part of American Airlines Alliance
Twitter Trials ‘Professional Profiles’ For Businesses – Report
