2,300,000 is how many employees Walmart has.
4,742 stores in the US.
350 employees per store on average.
The average per store using division would suggest 485 employees per store, but Walmart has 20-30% of jobs being in shipping, warehouse work and corporate, with 70-80% of jobs being the actual stores.
The average Walmart has 39 registers per store, with that being one of the most important jobs that nearly every employee is taught to do at some point.
Walmart for years has been discussing ways to use technology for self checkout or even using microchips or other methods to just let people walkout with items and pay on their phones.
This idea has become a problem an entire category of startups have tried to address for years in Silicon Valley and even big companies.
Amazon launched the convenience store Amazon Go in 2018, which promised completely cashier free checkout, which sensors monitor what people pay and everything is covered on someone’s phone.
That launched and has grown to 30 locations total.
That’s a big company investing into it, the startups are also huge.
Mashgin which was a startup founded in 2014 is now worth 1.5 billion dollars.
Standard Cognition is valued at 1 billion dollars.
Grabango is worth 1 billion dollars.
A series of companies working on different forms of self checkout have hit billion dollar valuations, with very little if any actual sales and not much proof there is a huge market interest.
On surface, it seems like a good idea.
Faster checkout
Saving money on labor.
Arguably better security, due to the chips.
The problem is after now a decade of this idea picking up, Walmart announced they aren’t going to continue plans to expand self checkout, which a few years ago they said would eventually be all checkout.
A lot of people are confused by this and many people are wondering why Walmart made this choice, with some believing they just popped a bubble.
Moving away from self checkout, a lot of people are confused why and the answer is very likely that self checkout actually is a money loser.
$12.86 an hour is the average Walmart cashier pay hourly.
250 customers an hour is how much Walmart has on average.
10 registers is reported as the average amount that’ll be open on a normal hour.
$130 an hour is the cost of operating registers hourly.
Walmart right now has an average checkout time of 11 minutes, which is the time that’ll it take on average from starting the wait in line to paying and checking out.
Almost every store sells items such as magazines, candy and drinks at the register of the store and every Walmart does.
Most of those items going for about $2 each.
Just 10% of Walmart’s 250 hourly customers purchasing an item would bring in $50 in revenue, which those items tend to be a higher markup over others and can help cut into the cashier cost.
This makes a case that registers by compelling people to wait a few minutes, makes people more likely to buy.
There’s also another problem which is order size might be reduced with self checkout.
$54 is the average checkout size for customers at Walmart.
Self checkout tends to be used by people buying fewer goods.
This creates a potential problem where with current self checkout machines, the added stress of doing it personally might make people buy fewer items.
This again being a risk, which could be why Walmart isn’t expanding self checkout.
It feels almost like Silicon Valley worked to invent a bigger problem over one that actually existed.
- Cashier spending for stores is extremely small.
- The 11 minute average wait for a store such as a Walmart isn’t a huge deal.
- There are tradeoffs, where getting rid of that wait could reduce sales.
This is why I believe self checkout or walkout payments won’t happen and most stores will continue using cashiers.
Walmart has put in hundreds of millions expanding self checkout and has the biggest logistics group in the country short of the Pentagon and Amazon.
If they are backing out, it’s a big sign Silicon Valley misfired.