Walmart Buys Alphabot Maker Alert Innovation

Walmart, gearing up to executive its strategy of operating micro-fulfillment centers (MFCs) in its retail stores, has agreed to acquire the microbot startup Alert Innovation.

The retail giant has been working since 2016 with the automation startup on its robotic grocery order-fulfillment technology, launching a pilot project for the autonomous system known as Alphabot, at a Walmart store in Salem, New Hampshire.

Alert’s Alphabots move autonomously in multiple directions, can operate in cold-storage areas and don’t require lifts or conveyors to move through fulfillment areas.

“Bringing the best of Alert’s technology and capabilities in-house will enable us to reach customers quicker by deploying MFCs with greater speed, providing both an unmatched shopping experience and a competitive advantage in omnichannel fulfillment,” said David Guggina, Walmart senior VP, in a statement.

Alert will continue to operate under its existing name and remain headquartered in the Boston area, according to the statement.

Last year, Walmart announced it would add robotic MFCs dozens of its stores, indicating it was testing automated systems from Demantic, Fabric and Alert.

Fabric, the New York-based on-demand retail platform, in Q2 launched a new 39K SF micro-fulfillment center in Dallas, the latest in a growing network of MFCs the platform owns and operates in the US.

Fabric said it plans to double the capacity of its MFC network by the end of this year, enabling the micro warehouses to service on-demand retail deliveries to 90% of US consumers in two days or less.

Fabric’s fully automated robotic MFCs, which can be operated by as few as three workers, use artificial intelligence software to manage inventories.

Micro-fulfillment centers, which can range in size from 2,000 to 50K SF—with most sized at less than 10K—are being embraced by retailers large and small as an essential component of new supply chain configurations that can support on-demand fulfillment needs.

A recent survey of Fortune 500 retailers found more than 90 percent expect to provide same-day delivery services to their customers by 2025. In a National Retail Federation survey earlier this year, nearly half of respondents cited faster fulfillment of online orders as their top priority.

According to a report from Ceva Logistics, retailers Target and Walgreens also are investing in automated MFCs. Walgreens, which has two MFC operating in Phoenix and Dallas, plans to introduce 11 MFCs across the US by the end of this year.

Instacart is using MFCs to fill online grocery orders placed via the Instacart Marketplace or through a grocer’s branded Instacart e-commerce site.