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Wal-Mart Builds More Warehouses, Better Tech to Boost E-Commerce Business

Thursday, October 6, 2016 5:01
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(Before It's News)

Walmart logoRetail giant Wal-Mart Stores, Inc. (NYSE:WMT) is taking aggressive measures to try to bolster its e-commerce business and better compete with its main foe, Amazon.com Inc. (NASDAQ:AMZN).

In its biggest move, Wal-Mart is scaling up its number of warehouses to cut down on shipping times for online orders. From Bloomberg:

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.

The company has also invested a great deal of time and money in upgrading its technological infrastructure, including state-of-the art robotic facilities:

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.

According to Bloomberg, Wal-Mart has spent about $3 billion over the past four years alone to boost its e-commerce and digital initiatives. The company has also been busy with M&A, recently acquiring Jet.com and installing its CEO, Marc Lore, as the new head of its online business.

These initiatives should help the company reach more shoppers and deliver goods faster. And while it may never catch Amazon on the e-commerce side, it can certainly widen the gap between its online business and those of other competitors.

WMT-2016-10-06

WMT shares rose $0.61 (+0.85%) to $72.28 in premarket trading Thursday. Year-to-date, WMT has gained 16.92%, versus a 5.76% rise in the benchmark S&P 500 during the same period.

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