Walmart Adding ‘Pop-Up’ Centers for Online Holiday Sales
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Walmart Inc. is placing “pop-up” e-commerce fulfillment centers inside dozens of its regional distribution facilities as it braces for an expected crush of online sales during the holiday season.
The 42 sites will hold fast-moving items in sections of warehouses that are traditionally used to ship pallets of goods to Walmart stores. The network of pop-up sites will ship up to 30% of Walmart’s online holiday volume, the company said in announcing the plan Thursday, adding to the fulfillment capacity at its stores and dedicated e-commerce campuses that typically contain two or more fulfillment centers.
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“It is a seamless merge of stores and e-commerce, so our buildings can do either one,” said Srini Venkatesan, an executive vice president at Walmart Global Technology who oversees supply-chain technology.
Putting both activities in one site also can reduce transportation costs, Mr. Venkatesan said. Walmart can use its trucks to move online orders from the pop-up sites to stores before handing them off for last-mile delivery, instead of shipping parcels from its big fulfillment centers through carriers such as United Parcel Service Inc. and FedEx Corp. “We are getting a much more distributed footprint,” he said.
Soaring online orders during the coronavirus pandemic are making it even harder for retailers and third-party logistics providers to accommodate big anticipated swings in volume over the holidays.
Walmart is hiring more than 20,000 seasonal workers at e-commerce facilities. Those numbers include workers at the pop-up sites, which will also use existing regional distribution center staff, Walmart spokesman Ravi Jariwala said.
Amazon.com Inc. is bringing on 100,000 seasonal workers this year, part of a broader hiring surge in warehousing and transportation sectors tied to e-commerce. Walmart rival Target Corp., which also has tested using one site to replenish stores and fulfill online orders, is keeping its overall seasonal hiring steady with last year, but increasing the number of workers who will go to distribution centers and to bolster curbside and in-store pickup of online orders.
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Walmart developed software to synchronize logistics systems for the stores with e-commerce systems and to integrate with the third-party carriers picking up loads from the sites. It also pushed out a warehouse management app that employees can use on their smartphones to pick orders.
Walmart still plans to expand its physical fulfillment capacity, but the company says the technology will help it get ready for the coming holidays faster.
“It’s faster and more cost-effective to build code than it is to build and permit a building,” Mr. Jariwala said.
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Walmart said its e-commerce revenue jumped 97% from a year ago. The company reported in its second-quarter earnings that sales have grown due to its online supply chain and grocery business. WSJ’s Sarah Nassauer reports. Photo: Eduardo Munoz/Reuters
Write to Jennifer Smith at jennifer.smith@wsj.com
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Appeared in the November 13, 2020, print edition as ‘Walmart Adds Sites To Holiday Logistics.’