Merchant Innovation

Walmart Bulks Up Distribution Centers For eCommerce Edge

Walmart is getting ready for the rush of holiday sales a bit earlier than normal this year as it has bulked up its distribution plans by expanding its distribution networks in order to stay competitive in the eCommerce space, Reuters reported, citing a Walmart senior executive.

It’s no surprise that major big-box stores like Walmart and Target have had to up their online focuses in order to stay on par with eCommerce giant Amazon — which was recently officially crowned the world’s top retailer in terms of market value. To combat Amazon’s growing threat, it’s also invested heavily in its eCommerce side — which includes setting aside at least $1.5 billion in 2015 alone.

While Amazon’s edge has been its massive distribution centers, Walmart is attempting to keep up with its own expanding warehouse plans, which include massive warehouses that are dedicated to its eCommerce side. Walmart now has five online distribution centers, and the retailer claims that it can deliver to roughly 95 percent of the country in a two-day span.

The two-day shipping threshold, it now seems, is the latest competition on the eCommerce logistics market.

Speaking to Reuters, Michael Bender, chief operating officer of global eCommerce, said that having such large facilities to house more packages allows the company to ship out products more efficiently. It’s also going to be a game changer when the holiday rush rolls around.

“Christmas for us will be very different than Christmases of the past where we have had to work out of facilities that are not like this,” Bender said.

Outside of having more space to house and process those packages, Walmart is also investing in technology that can help the retailer continue to ship packages quicker and at a lower cost. This includes tailoring their systems with algorithms that can help Walmart’s warehouse teams know which products should be routed where and how they can be best stored, scanned and picked up. The new technology also makes it easier for workers to understand the best way to combine orders so customers are getting items in less shipments — which also reduces costs.

As for other major eCommerce initiatives at Walmart, Bender indicated that Walmart was still in test mode for its $50 membership program that boasts three-day free shipping. He also hinted that next day delivery or same-day delivery could eventually be brought into the mix.

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