According to comments at a recent Walmart Investment Community Meeting, the company plans to invest heavily over the next year in an enhanced automated e-commerce fulfillment environment. Walmart envisions that a focus on automation will help expand its fulfillment capacity. This concentration comes at a time when the business is trying to bring more customers to Walmart+, a competitor to Amazon Prime.
According to Walmart’s recent earnings release, the retailer plans to spend $14 billon on capital expenditures during fiscal year 2022, which the company said will “focus on supply chain, automation, customer-facing initiatives, and technology.”
Per CEO Doug McMillon: “Our automation plan is now ready to scale. We’ll be investing in our distribution centers, our e-commerce fulfillment centers, and in market fulfillment centers, which will, in many cases, be inside of or built beside our stores.”
Last month, Walmart stated that it was working to build out its network of local fulfillment centers, which the company refers to as LFCs. LFCs are the facilities that McMillon mentioned will be located “inside of or built beside our stores.”
The fulfillment centers closely resemble an Amazon fulfillment center. But keep in mind that Walmart’s LFCs also provides customers with the option to personally pick up products at the facility. The latter is not taking place at Amazon fulfillment centers. Walmart’s fulfillment technology partners are Alert Innovation, Dematic, and Fabric.
Walmart is now making 1.5 million deliveries every week from its stores. This is a rate seven times greater than last year’s figures.
BFD’s Take: Brand Focus Digital acknowledges that Walmart is doubling down on its recent success. We also believe that the company’s announcements and investments show that the retailer is positioning itself to better compete with Amazon in the U.S. While Walmart still has some work to do to emerge as a head-to-head competitor with Amazon, the company is becoming better positioned to do so than any other competitor out there.
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