As Walmart continues to beef up its competition with Amazon for online sales, the Arkansas-based retail giant has enlisted the help of a Durham company to improve the delivery of its packages.
Bell and Howell, a Durham company that historically made high-speed mail sorters, is helping Walmart place automated package-pickup towers in hundreds of stores across the country. The towers are designed to help solve one of the peskiest problems for online sales: the last mile of delivery.
The pickup towers, which stand around 18 feet tall, store online orders, so that customers can come to the store and pick up their purchases without ever interacting with an employee.
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The towers – called PackRobots – are designed by Cleveron, an Estonian technology company that distributes in the U.S. exclusively with Bell and Howell. Bell and Howell’s field engineers install and service the towers.
Customers scan a QR or barcode from their online order, and a mechanism brings the item to a window for pickup. The tower can also adjust its shelves to the size of the packages to maximize its available storage.
It’s easy to see why Walmart would be interested in using them. The company can save a lot of money having customers come to the store rather than wait for delivery.
“The holy grail of the e-commerce world is the ability to take an order online and make sure it it gets into your hand as quickly, easily and cheaply as possible,” Bell and Howell CEO Ramesh Ratan said. “Smart lockers are 30 times cheaper than delivering packages to people’s homes. … (A customer) can get a 20 percent discount because you are saving an enormous amount on shipping costs.”
Amazon, which recently unveiled its own smart lockers at Whole Foods grocery stores across the country, dominates the e-commerce market – though Walmart has sought to close the gap. Amazon currently ranks No. 1 in e-commerce sales with $95 billion in online sales, while Walmart comes in at No. 3 with $14 billion in online sales, according to eMarketer.
Five pickup towers were originally rolled out during a pilot program earlier this year, but the program was expanded to around 100 stores. The closest Walmart pickup tower is in Wake Forest, which also has other smart lockers available for larger purchases, since the tower can only hold items that are around the size of microwave.
The number of towers is likely to increase next year. A Walmart executive said earlier this year that the company wanted to expand its pickup towers to 500, according to Bisnow.
“Think of this as an ATM for parcel pickup,” said Walmart Vice President of Real Estate JP Suarez, according to Bisnow. “We’re putting 500 of these towers in our stores, we love them.”
Efforts to reach Walmart for this story were unsuccessful.
Ratan said that Walmart was attracted to Bell and Howell because its 650 engineers would be able to service the products across the country. Its engineers – who do equipment maintenance for its own products as well as other companies – could be within an hour and a half of any Walmart in the U.S. and Canada, Ratan said.
The towers, which retail for $100,000, have been an important part of Bell and Howell’s transition away from the mailing business. The company, which was bought by Philadelphia-based Versa Capital Management in 2011, had seen its revenue decline for several years, leading to layoffs and parts of the business being sold.
But the company, which employs around 250 people in Durham, has returned to a positive EBITDA – that is, earnings before interest, taxes, depreciation and amortization, a key performance indicator – in recent years, Ratan said.
“This is a part of e-commerce and retail where we think we have a good chance at being the premier provider of service,” Ratan said. “We would like to ride this wave of growth.”