Wal-Mart Stores Inc. is experimenting with “click and connect” and focusing on creating more pickup points for goods ordered online.
The retailers wants to “provide choice and convenience through dynamic distribution points” such as stores and other locations, as well as home delivery, Tracy Rosser, senior vice president for transportation and supply chain for Walmart US said.
Mr. Rosser was addressing an Institute for Supply Management conference this week in Phoenix.
The company is testing such an access point in Bentonville, Ark., where Wal-Mart has its headquarters.
Mr. Rosser compared it to a Sonic fast-food restaurant, where customers can specify a pickup time frame, drive to the location, present an order number, collect ordered items and depart.
Retailers are looking for ways to serve the growing e-commerce market while also maintaining traditional distribution apparatus for their stores.
The world’s largest retailer is accustomed to moving “truckloads of merchandise that was going to stores for customers to buy,” said Mr. Rosser, who manages Wal-Mart’s 6,000-truck domestic transportation fleet.
But “now, if you’re supplying Wal-Mart, you’ve got a customer who might have already purchased that product and paid for that product. That requires a whole different level in terms of precision, pickup performance, and distribution through the stores or to the home, because the customer has already given you the money. They want to know when it’s going to be there and what condition it’s going to arrive in,” he said.
Next-day delivery services are “becoming the norm” at some big retail chains and as Amazon.com improves fast delivery by opening fulfillment centers near major population centers, Mr. Rosser said. Wal-Mart has at least 70 home-delivery trucks of its own, and its selection of items available both online and in stores has grown from a few hundred thousand to about 8 million, Mr. Rosser said.
“It’s the biggest change I’ve ever seen,” he said. That said, Wal-Mart’s built-in advantage is that it already has “more than 11,000 nodes of distribution” also known as its physical stores around the world.
Wal-Mart Builds Supply Chain to Meet E-Commerce Demands
Distribution centers dedicated to online sales are part of a new logistics strategy as the retail industry sees customers take sales online
Wal-Mart Stores, Inc. and other retailers are trying to build distribution channels dedicated to the special demands of online commerce. Photo: Reuters
Traditional warehouses are built to store pallets of products that are moved by forklifts to and from bays where trucks are loaded and unloaded. An e-commerce facility is fine-tuned for individual items, more like a sorting facility for parcel handling, to be picked and packed for individual shoppers.
Each of Wal-Mart’s new facilities will be more than 1 million square feet and hold at least 500,000 items - much larger than its traditional distribution centers for stores, which hold 30,000 to 50,000 items. Wal-Mart opened an e-commerce center in Texas last year, and like that one, the new buildings will use both human labor and automation, such as computer-controlled chutes, to move items. The new centers will be part of a network for filling online orders that includes traditional buildings, plus 11 existing smaller e-commerce centers and 83 Wal-Mart Supercenters that have been designated “ship-from-store” locations.
Source: Wall Street Journal
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