Will pop-up e-commerce fulfillment centers help Walmart manage demand?
Walmart has carved out space in 42 of its U.S. regional distribution centers (RDCs) to create “pop-up e-commerce distribution centers” (eDCs) to support online delivery of fast-sellers this holiday selling season.
“Traditionally, RDCs ship pallets of goods to our stores, which is very different than sending packages directly to customer homes,” said Greg Smith, EVP, supply chain, Walmart U.S., in a blog entry. “Working closely with our technology team, who developed new and enhanced some of our existing supply chain systems, 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.”
On LinkedIn, Srini Venkatesan, EVP at Walmart Global Tech, detailed changes to the reconfigured warehouses:
- Implementing random stow for both sortable and non-sortable items;
- Improving pick times to avoid congestion in aisles with frequently purchased products;
- Warehouse management app compatibility on BYOD;
- Cloud-based integration to manage third-party fulfillment solutions;
- Enhanced fulfillment visibility to meet delivery dates.
“We anticipate up to 30 percent of our holiday volume being shipped from our pop-up eDCs,” said Mr. Venkatesan. “After the holiday, EDC’s will have the flexibility to scale up and down, and the lessons learned will be applied as we continue to further evolve our network in the future.”
Combining stores and e-commerce fulfillment can reduce transportation costs, Mr. Venkatesan told The Wall Street Journal. Walmart trucks can move online orders from the pop-up sites to stores for last-mile pickup from third-party carriers instead of shipping parcels from central fulfillment centers. “We are getting a much more distributed footprint,” he said.
Retailers continue to experiment with a number of fulfillment models as online growth kicks into a higher gear during the pandemic. Beyond converting distribution centers to ship both direct and retail fulfillment out of one inventory, options include building separate fulfillment centers to solely support online orders, opening smaller e-commerce warehouses near busy urban centers and leveraging stores, whether open or closed (dark), as micro-fulfillment centers.
- ‘Pop-Up’ eDCs Help Meet the Demand for Holiday eCommerce Orders – Walmart
- Technology and Supply Chain Working Together for Customers – Srini Venkatesan/LinkedIn
- Walmart Adding ‘Pop-Up’ Centers for Online Holiday Sales – The Wall Street Journal
- Macy’s is turning stores dark for the holidays – RetailWire
- Is robotic micro-fulfillment the path to streamlined grocery pickup? – RetailWire
- Will limited-assortment warehouses help Chewy avoid ‘demand shock’? – RetailWire
DISCUSSION QUESTIONS: What benefits do you see in a pop-up changeover approach to distribution centers to handle spikes in online selling? Does fulfillment of online orders from distribution centers promise more efficiencies than shipping from separate online-only warehouses or from stores?