Walmart will double the number of stores it uses for fulfillment to 50 locations this year, and will test the use of lockers to hold online orders for customer pick up in about a dozen of its brick-and-mortar stores. Developing a “next-generation fulfillment network” was recently identified as a key global priority for 2013 by Walmart CFO Charles Holley.
Noting that two-thirds of the U.S. population lives within five miles of a Walmart store, Walmart Global eCommerce president/CEO Neil Ashe said “No one else has 4,000 points of distribution within a stone’s throw of every customer in America,” according to published reports.
Using stores as fulfillment centers allows Walmart to offer same-day or next-day delivery of online orders at very low cost, according to a Reuters article quoting Walmart.com chief executive Joel Anderson.
While 50 stores and a dozen locations with pick-up lockers represent only a small fraction of Walmart’s physical footprint, these developments show that the world’s largest retailer takes the threat of competition from Amazon and its Prime delivery service, which provides free two-day shipping in the U.S. for an annual fee of $79, seriously.
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For its part, Amazon has installed pick-up lockers in grocery, convenience and drugstores for several years, and Google acquired a delivery locker start-up called BufferBox in November.
Walmart is on track to surpass $9 billion in online sales this year, and has been expanding the number of items it offers via digital channels. Product assortment on Walmart.com grew 35% to 40% to two million items in 2012, and the company plans to double that figure this year.