Wal-Mart's next move against Amazon: More warehouses, faster shipping

Thu Oct 6, 2016 8:10am EDT
 
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By Nandita Bose

CHICAGO (Reuters) - Wal-Mart Stores Inc (WMT.N: Quote) is accelerating its investment in e-commerce in a bid to narrow the gap with Amazon.com Inc (AMZN.O: Quote) and to give it an even more dominant position against the rest of the field in retail.

The world's largest retailer is now on track to double the number of giant warehouses dedicated to online sales to 10 by the end of 2016, according to Justen Traweek, vice-president of e-commerce supply chain and fulfillment.

That pace is faster than the 8 large warehouses that industry consultants expected Wal-Mart to build by the end of 2017.

At the same time, Wal-Mart in the last year has installed new technology such as automated product sorting and improved item tracking that for the first time puts them on par with Amazon's robot-staffed facilities, according to supply-chain consultants.

"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 said.

Wal-Mart is holding its annual investor day on Thursday when, among other topics, it is expected to update on the progress it has made in its e-commerce business.

Wal-Mart, which has about 4,600 stores in the United States and over 6,000 worldwide, has been investing in e-commerce for 15 years, but it still lags far behind Amazon.

"These additions definitely give Wal-Mart the opportunity to compete better than other companies going head-to-head with Amazon," said Steve Osburn, director of supply chain with consultancy Kurt Salmon, referring to the likes of Target (TGT.N: Quote) and others. "Having said that, choosing to race with Amazon is different than catching up with them."   Continued...

 
Aircraft flies over a Wal-Mart billboard in Mexico City March 24, 2015. REUTERS/Edgard Garrido/File Photo