Wal-Mart Stores Inc. is stepping up its e-commerce fulfillment efforts as it continues to try and grab a greater slice of the e-commerce market.
The world’s largest retailer opened a new 1.2 million-square-foot e-commerce fulfillment center in Bethlehem, Pa., this week. The new facility will employ 400 workers and, Wal-Mart says, boasts state-of-the-art automation and warehousing systems.
A spokesman for Wal-Mart, No. 3 in the Internet Retailer 2015 Top 500 Guide, declined to say how many fulfillment centers it owns and operates in the U.S. but said the retailer plans to open four large e-commerce fulfillment centers by the end of the year that will be able to get online orders to 95% of the U.S. population in two days or less, whether through in-store pickup or delivery.
The two-day goal is likely not chosen at random: The Amazon Prime loyalty program promises members free two-day shipping on all purchases. Market research firm Consumer Intelligence Research Partners LLC estimates 41 million U.S. consumers belong to Prime, which charges a $99 annual fee. Walmart.com is testing its own program, called ShippingPass that offers consumers free three-day shipping for $50 per year.
While Wal-Mart’s e-commerce distribution centers are key to getting online shoppers their orders quickly, the spokesman for the retailer stressed they are but one part of Wal-Mart’s fulfillment strategy.
“We have dozens of other facilities that fulfill online orders, including smaller e-commerce fulfillment centers, store distribution centers that ship online orders, more than 80 Wal-Mart stores that ship online orders directly to customers, and 4,500 stores across the U.S. where customers can pick up their online orders for free,” he says. “It’s the combination of all these assets—which are all connected by Wal-Mart’s world-class transportation fleet—that allow us to get closer to customers, deliver more products faster and at a lower cost.”
The new fulfillment center opens as Wal-Mart finds itself in a head-to-head battle for customers with Amazon.com Inc., No. 1 in the Top 500. On July 13, Wal-Mart launched an online sales promotion as a counterpunch to Amazon’s 20th anniversary Prime Day sale, which Amazon had scheduled for July 15. A Wal-Mart spokesman told Internet Retailer that the first three days of the promotion, from Monday-Wednesday, were among the biggest online sales days in the company’s history.
For the first quarter of fiscal 2016, Wal-Mart reported online sales grew 17% year over year.
Favorite