In an effort to make big waves in e-commerce, Walmart is gearing up to make more of a massive foray into its online business.
Walmart is one of the largest retailers in the United States. Known for its vast department stores containing household products, including groceries, clothing, and pharmaceuticals, the enterprise has also expanded its online presence. Due to an acceleration of online orders, Walmart will be opening four packing facilities over the next three years to get packages out quicker.
These facilities, known as fulfillment centers, will have high-tech automation to help pack orders faster. The first location will open in Joliet, Illinois, approximately 40 miles south of Chicago. The facility plans to open this summer and start shipping out orders immediately after. Walmart intends to compete with Amazon’s extremely efficient shipping process, having products sent out within the following day of the transaction. Walmart wants to increase its one-day and two-day shipping capabilities, helping bolster its online consumer base.
Over the pandemic, Walmart experienced a significant increase in online orders and transactions. The company already has 31 packing facilities for shipping products paid for online, with 75% of its brick-and-mortar stores fulfilling online purchases as well. Still, these locations are not enough to keep up with the increase of virtual Walmart shoppers, and it’s definitely not enough to excel in next-day shipments. The massive retailer hopes to build an efficient shipping practice similar to an Amazon Prime membership’s expedited shipping.
Walmart’s issue with its current packing facilities is that its employees face unusually laborious tasks. The facilities are not designed efficiently, meaning that employees could walk nine miles per day to retrieve items off the shelves, return to their packaging station, and repeat. The constant walking back and forth between the product storage and the shipping area has put employees under massive strain. Building facilities with more automated functions can help alleviate the amount of unnecessary walking for employees and get products shipped faster.
In these new fulfillment centers, employees won’t have to scatter through the warehouse to find the specific product to be shipped. An automated system will find the item and shuttle it back to the employee’s station, where it will be adequately packaged. The employee will only be in charge of the packaging process, measuring the item, fitting it with the perfect box, and attaching the correct label. This will allow for more efficient shipping and decrease the intense, physical labor thrust on many employees working in Walmart’s previous facilities.
Walmart isn’t the only company utilizing automation to complete tasks. Both Amazon and Kroger have started to employ automation systems to increase efficiency while dealing with understaffing issues. Amazon was one of the first major retailers to utilize this type of mechanization, acquiring Kiva Systems ten years ago to build their wheeled warehouse robots. In April, Amazon invested one billion dollars into tech companies developing supply chain automation. Other companies are following suit and funding more programs to create necessary technology for their manufacturing facilities.
Alongside the fulfillment center announcement, Walmart added that it would hire 4,000 new employees for the vacant warehouse jobs. Though the company pays warehouse workers anywhere from $16 to $28 per hour, Walmart said recent hires would be paid more than $20 per hour.