Walmart Is Doubling Down On Its Ecommerce Initiatives
By Christine Kern, contributing writer
Retail giant plans to double its ecommerce warehouses and slow its brick-and-mortar store openings.
In an effort to boost its ecommerce sales, Walmart is doubling down on its initiatives, doubling the number of its web-oriented warehouses to 10 by the end of this year (even more than the eight analysts had expected by the end of 2017) and installing automated product sorting and item tracking technologies to rival Amazon’s operations, Justen Traweek, vice-president of e-commerce supply chain and fulfillment told Reuters. As part of this commitment, Walmart has also installed new technology including automated product sorting and item trackers to help improve Walmart’s speed to market, helping them complete with rival Amazon.
“We have doubled our capacity in the last twelve months and that allows us to ship to a majority of the U.S. population in one day,” Traweek told Reuters.
“These additions definitely give Walmart the opportunity to compete better than other companies going head-to-head with Amazon,” explained Steve Osburn, director of supply chain with consultancy Kurt Salmon. “Having said that, choosing to race with Amazon is different than catching up with them.”
It also is slowing its plans for opening new brick-and-mortar stores in order to shift resources to its ecommerce initiative. The brick-and-mortar slowdown means Wal-Mart will open just 35 new supercenters in fiscal 2018, compared to the 69 it opened last year, and will open just 20 new Neighborhood Market stores in the same period, way down from the 161 it opened last year.
At its annual Investment Community Meeting Thursday, Wal-Mart Stores executives detailed plans to pivot toward e-commerce, earmarking $11 billion in capital spending to boosting online sales while drastically slowing down the number of new physical stores the company opens.
Walmart President and CEO Doug McMillon stated, “We are encouraged by the progress we’re seeing across our business and we’re moving with speed to position the company to win the future of retail. Our customers want us to run great stores, provide a great e-commerce experience, and find ways to save them money and time seamlessly- so that’s what we’re doing.”
And according to The Wall Street Journal, Walmart is also moving to boost its e-commerce presence in China, almost doubling its stake in e-commerce marketplace JD.com. In June Walmart sold its Chinese e-commerce platform Yihaodian to JD, China's second-largest online retailer behind Alibaba.
Walmart has experienced rather lackluster e-commerce sales compared to its rivals, but those sales are projected to grow between 20 percent to 30 percent in the second half of the year.