Walmart Builds Up Online Fulfillment Network
As the world's reigning retailer, Wal-Mart Stores, Inc. brought in $469 billion in sales in 2012, $7.7 billion of which came from online (according to Internet Retailer). This holiday season, customers will have access to more than five million products on Walmart.com, which is more than twice as many as last year. Accordingly, Walmart expects online sales to exceed $10 billion globally this fiscal year.
To support its growth, Walmart continues to expand its next-generation fulfillment network, and announced plans just yesterday to open two new centers dedicated to filling online orders, one in Texas and another in Pennsylvania that will be its largest ever. In addition to these new and existing facilities, Walmart is taking steps to more effectively ship online orders from stores and many of its more than 130 distribution centers, all leveraging its world-class transportation network. The new online facilities extend Walmart’s anytime, anywhere experience that lets customers shop seamlessly across online, mobile and stores.
“With our dedicated online facilities and 4,100 stores within five miles of two-thirds of the U.S. population, we gain a significant advantage by being positioned in the most important location – close to our customers,” said Joel Anderson, president and CEO of Walmart.com.
Currently, more than 10 percent of units ordered on Walmart.com are shipped to a customer’s door from a store, and more than 50 percent of these orders are delivered in two days or less. In the past two years, Walmart.com has sped up delivery by 15 percent, while reducing overall costs by 10 percent by optimizing the way orders are shipped using Walmart’s different physical locations. Part of this optimization is enabled by algorithms developed by @WalmartLabs that determine the best shipping node based on the customer location and items ordered. The new centers will provide even faster delivery while further reducing costs.
The new center based in Fort Worth, Texas, is 800,000 sq. ft. and will have 275 full-time positions. It began shipping orders last week. The Bethlehem, Pa. operation will be more than one million sq. ft. and will ultimately employ more than 350 full-time associates. It is scheduled to open in the first quarter of next year. Combined, the new operations will house hundreds of thousands of items ranging from electronics, to toys, apparel, fitness equipment, sporting goods and more.
The developments aside, Walmart still has a long way to go to match its biggest online competitor, Amazon.com, Inc., which by comparison generated $61 billion in revenue last year. By last count, the online retailer opened eight fulfillment centers in the United States.
In order to meet an increase in customer demand this holiday season, it is also creating more than 70,000 full-time seasonal jobs across its U.S. fulfillment centers, a 40 percent rise over last year.
In 2012, Amazon converted thousands of seasonal employees into regular, full-time roles after the holidays, and expects to do the same this year.
“So far this year, we have converted more than 7,000 temporary employees in the U.S. into full-time, regular roles and we’re looking forward to converting thousands more after this holiday season,” said Dave Clark, Amazon’s vice president of worldwide operations and customer service. “Each year, seasonal jobs lead to thousands of long-term, full-time roles in our sites — jobs that offer great pay, benefits starting on day one and the chance for employees to further their education through our Career Choice program.”
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