Retail

Walmart Ramps Up Warehouse Construction

According to reports out over the weekend care of NBC, Walmart is ramping up its eCommerce investment on the back end with the planned doubling of its warehouse capacity dedicated to online sales by the end of the year. That will put the total number of Walmart’s eCommerce-only fulfillment centers to 10, according to Justen Traweek, vice president of eCommerce supply chain and fulfillment.

That expansion is partnered with Walmart’s other recent upgrades, including automated product sorting and improved item tracking. According to analysts and supply chain experts, Walmart's newest capacities are bringing it, for the first time, up to the level of its main online competitor, Amazon.

“We have doubled our capacity in the last 12 months, and that allows us to ship to a majority of the U.S. population in one day,” Traweek said.

Walmart's current store footprint includes 4,600 stores in the U.S. (6,000 worldwide), and that footprint will not see much in the way of expansion this year, according to reports from Walmart itself out of its investor day last week. But Walmart has also quite publicly signaled its strong intent to race hard against Amazon for dominance on the web, using its physical retail organization as an asset. Walmart has also recently added Jet.com to its arsenal of eCommerce weapons.

“These additions definitely give Walmart the opportunity to compete better than other companies going head-to-head with Amazon,” said Steve Osburn, director of supply chain with consultancy Kurt Salmon, referring to the likes of Target and others.

“Having said that, choosing to race with Amazon is different than catching up with them.”

The massive warehouses are key to Walmart’s developing eCommerce strategy because they enable the company to deliver packages more economically when shipping online orders with multiple items. The current system has single orders with items shipping from multiple warehouses nationwide — a costly and inefficient method for handling eCommerce.

“This improves two fundamental things: Walmart’s speed to market, which is how fast their products reach consumers, and it will help them reach an even larger audience,” said Regenia Sanders, vice president of supply chain at consultancy SSA & Co.

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