Walmart Will Use Stores Plus Fulfillment Centers for Next-Gen Network

Developing a "next generation fulfillment network" will be one of Walmart's key global priorities for this year, along with investing in a global e-commerce platform that will provide the world's largest retailer with common digital technology in multiple countries.

Work on the fulfillment network will begin in the U.S. "We are still in pilot phases of our same day delivery for Walmart U.S. but we know we have a very important advantage in our brand and promise," explained Walmart CFO Charles Holley in a presentation at the Bank of America Merrill Lynch Consumer & Retail Conference last week. "Along with the 4,000 stores that are within a very short distance of a large part of the population, we are also going to be using dedicated fulfillment centers.

"We will continue to invest not only in how the customer wants to shop but how they want to receive merchandise," Holley added.

Internationally, digital sales are a key focus for the coming year. "We're investing very heavily in global e-commerce," said Holley. He noted that the retailer has a solid foundation already in the U.S. and the U.K., "a new and exciting platform of growth in China, and we have a very fast growing business in Brazil and we'll continue to focus on these important markets driving customer acquisition and retention."

The retailer is supporting its digital commerce efforts with technology investments, including improvements to its Polaris search engine and the development of its Pangaea global e-commerce platform. "We want to have a common global platform that can flex to the market," explained Holley. "Right now we have different technology we're using in some of these markets so we need one common platform and we think that will take us a long way. Mobile technology is another small part of investment but important I think."

Walmart is also making efforts to rein in expenses and run its stores more efficiently. At its Sam's Club stores, the retailer is piloting self-checkout POS registers. "That's made us much more efficient and much more productive in the Club, our membership scores also have gone up in those clubs along with associate scores," Holley reported.

He also discussed the retailer's My Guide task management system, which has been in place in U.S. stores for the past 12 to 18 months. "It tells [store associates] where they should be, when they should be there and what they should be doing," he said. "In the past, they had to go to their assistant manager or their department manager and find out where they wanted them, what they had to do. It's made us much more efficient in the store."

The retailer also uses a scheduling system that helps match the number of store associates working with the number of customers in the store. "We continue to fine tune it to make sure associates are in the store when they're needed," said Holley, admitting that "quite frankly we're still not where we should be, we have more room to get better at that."

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