Walmart Debuts Pop-Up E-Commerce Distribution Centers

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Walmart Debuts Pop-Up E-Commerce Distribution Centers

By Bridget Goldschmidt - 11/13/2020
Walmart Debuts Pop-Up E-Commerce Distribution Centers
Walmart's new pop-up e-commerce distribution centers enable the retailer to get items to customers quickly without having to build new facilities and while continuing to follow existing health and safety protocols.

In an effort to handle all of the gift orders expected to pour in from grocers shopping online, Walmart has decided to “get creative” with its supply-chain capabilities, as Greg Smith, EVP, supply chain, Walmart U.S., explained in a recent blog post.

“By leveraging new and existing technology, and using some of our current real estate differently, we are increasing our e-commerce fulfillment capabilities as we prepare for the holidays,” wrote Smith in the post, adding: “We are taking space in 42 of our current regional distribution centers (RDCs) and creating what we call ‘pop-up e-commerce distribution centers’ (eDCs) to meet the growing demand of e-commerce orders. Traditionally, RDCs ship pallets of goods to our stores, which is very different than sending packages directly to customer homes. Working closely with our technology team … we’ve been able to increase our fulfillment throughput. This means facilities that have traditionally only supplied products to stores are now equipped to also fulfill online orders, just in time for the holidays.”

The flexibility of the pop-up concept allows Walmart to get items to customers quickly without having to spend time building new distribution centers and while continuing to follow existing health and safety protocols, Smith explained.

Mike Troy, editorial director of Progressive Grocer and Retail Leader, speculated that Walmart will use the pop-up center “to house some of the most heavily promoted holiday items, where they expect big volume, and that will take pressure off the stores having to fulfill the orders.

Troy added that the pop-ups are “going to make for a different work environment. When you go in a DC, the thing that stands out is how there are no people, just boxes of goods moving around on conveyor systems, with scanners reading bar codes to route from one truck to another truck, with the main involvement of people unloading and packing trucks, and even with that process there are automation tools.”

The pop-ups, meanwhile, “will involve people putting individual items on trucks for delivery to customers, … so [it’s a] different type of work in the building and also [a] different type of truck traffic, with vehicles suited for home delivery coming and going to DCs, in addition to the 18-wheelers going to Walmart stores,” he observed.

Additionally, the pop-ups will enable Walmart to keep up with shopping trends and better compete with the likes of Amazon, according to one industry observer.

“This move from Walmart is particularly timely as the nation is seeing a new wave of COVID-19 surges, which will make shoppers less inclined to go to the store,” noted Meyar Sheik, president and chief commerce officer at Dallas-based order management software company Kibo Commerce.It is also a more convenient option than curbside pickup, especially during peak holiday sales days, when many shoppers will likely prefer to avoid busy shopping areas where most Walmart and other popular retailers are located. Last but not least, this is a direct shot across the bow to Amazon. The move from Walmart further levels the playing field against Amazon’s distribution and logistics advantage as it pertains to expedited shipping options such as one-day or same-day delivery. Retailers looking to compete against this model should look to offer their shoppers flexible fulfillment options that leverage their physical store presence, such as utilizing stores as micro-fulfillment stores, exploring the concept of dark stores, and adding fulfillment options like BOPIS, BOPAC, ship from store, and buy online, return in store (BORIS).” 

Bentonville, Arkansas-based Walmart operates more than 11,300 stores under 58 banners in 27 countries, and e-commerce websites, employing 2.2 million-plus associates worldwide.