Dive Brief:

• Walmart on Thursday said that its Pickup Towers — giant in-store pickup kiosks now in almost 200 stores — will be in more than 700 locations by the end of the year, making them available to nearly 40% of the U.S. population.

• The retail giant is rapidly expanding its use of the vending machine-like towers after an "overwhelmingly positive" response from customers, Walmart spokesperson Justin Rushing said in a company blog post. More than half a million orders have been retrieved through the towers since they were first introduced, he also said.

• The retailer is also modifying the pickup areas with new "Pickup Lockers" that will allow customers to retrieve online orders of bigger items like televisions, the company said. Walmart is working on an app that will allow shoppers to use the towers for returns, according to a report from global intelligence and advisory firm PlanetRetail RNG emailed to Retail Dive.

Dive Insight:

In-store pickup is an expanding feature at several retailers — Amazon, Macy's and Nordstrom all have lockers, for example, and Target has set aside a special counter with dedicated staff — but Walmart's kiosks are particularly immense and tech-enabled.

They are also key features of Walmart's retail transformation. By reducing the need for staff, they drive down online order fulfillment costs and speed up the process. Indeed, Walmart these days is investing more in store renewal, including the kiosk rollout, than in opening new locations. Capital spending will reach some $11 billion this year, on par with 2017, including investments in store remodels, supply chain and e-commerce operations, executives said last October. At the same time, the company unveiled its most scaled back brick-and-mortar growth in the U.S. in some 15 years, with plans for just 15 new Supercenters and fewer than 10 of its smaller Neighborhood Markets. 

The bright orange kiosks, which seem destined to be become an iconic feature of Walmart stores, also have implications for suppliers, marketers and customers. Suppliers, for example, long subject to Walmart's demands on variables like price and speed, may be required to meet new labeling and packaging standards on products available through the automated pickup towers, according to PlanetRetail RNG analysts. Footfall in those areas of the stores is increasing, and merchandising displays and other marketing will follow, PlanetRetail RNG also notes.

"We expect Walmart to continue rolling out this fulfillment option to its more than 3,500 U.S. Supercenters," PlanetRetail RNG analyst Danielle Dolinsky told Retail Dive in an email, adding that Walmart's plans to double down on the tower rollout show they're working well. "The convenient locations ensure shoppers can get in and out of the store quickly while they utilize infrastructure and labor from Walmart's existing Supercenters. The pickup lockers will be a natural extension of the towers, as they can store larger items that the towers couldn't support, enabling Walmart to expand the items offered through the service."