Dive Brief:

• Walmart, in partnership with autonomous vehicle company Gatik, is launching a driverless delivery pilot to transport customer orders between two of its stores on a two-mile route in Bentonville, Arkansas, according to a company blog post.
• In March, Arkansas passed a law that allows autonomous vehicles to operate in the state. The Gatik vehicles, which will be staffed during the test run, will move between a Walmart grocery pickup location and a Walmart Neighborhood Market, the Arkansas Democrat-Gazette reported.
• The vehicles will operate from 8 a.m. to 8 p.m. seven days a week and will make five to nine trips per day during the pilot, according to the Gazette.

Dive Insight:

Walmart and Gatik first announced their partnership earlier this summer when the startup raised $4.5 million in funding. Gatik's differentiator is that it's attacking delivery's "middle mile" — the short trips to transport goods between businesses using light commercial, autonomous vans and trucks rather than large, long haul trucks or small, local delivery vehicles.

Some experts estimate that the middle-mile in grocery delivery could be a $1 trillion market. And it could prove to be a more promising field for autonomous vehicles because the routes are routine and repeatable, and because it doesn't interface with consumers on the back end. Although driverless delivery vehicles like Nuro promise efficiency, many shoppers are still uneasy with the technology. Three out of four consumers recently surveyed by AAA say they're afraid of autonomous vehicles, and less than half, or 44%, say they're comfortable with driverless vehicles being used to deliver food and packages. Some who have tried grocery delivery say they don't like walking to the curb to collect their groceries.

Autonomous B2B deliveries could be a major operational advantage for Walmart Grocery Pickup, helping shuttle goods from store to store, and from warehouse to stores, in time with consumer demand. The free service will be available at 3,000 stores by the end of this year.

Walmart has continued to make advances in the autonomous vehicle space. It began a pilot project with autonomous vehicle company Udelv in January at its Surprise, Arizona store where the startup tested a custom-made cargo van designed to deliver fresh groceries. It also launched a trial with Waymo in Arizona, and teamed up with Ford in a Miami-Dade County pilot to explore autonomous vehicle technologies.

Despite consumer hesitations, retailers seem to be hitting the gas pedal pretty hard on autonomous technology pilots. Kroger’s autonomous delivery pilot proceeded to a new phase in March using Nuro’s self-driving Toyota Priuses, which are currently manned, to deliver groceries from two stores across four zip codes. Meanwhile, H-E-B announced a driverless delivery pilot with Udelv earlier this year.