From Ground-Breaking to Breaking Ground: Walmart Begins to Scale Local Fulfillment Centers

Jan. 27, 2021
By Tom Ward, SVP of Customer Product, Walmart U.S.

It's clear that one of Walmart's competitive advantages is our stores. And today, stores are transforming to serve more and more purposes - we're using them to fill pickup and delivery orders, make Walmart.comdeliveries and more. We have a great operation that will serve us well for years to come, but we aren't stopping there.

Our customers love the speed and convenience of pickup and delivery, and we're committed to finding faster ways to serve them, which is why we're scaling the number of stores that will also serve as local fulfillment centers. We're already planning dozens of locations, with many more to come.

A local fulfillment center(LFC) is a compact, modular warehouse built within, or added to, a store. In addition to fresh and frozen items, LFCs can store thousands of the items we know customers want most, from consumables to electronics.

Instead of an associate walking the store to fulfill an order from our shelves, automated bots retrieve the items from within the fulfillment center. The items are then brought to a picking workstation, where the order can be assembled with speed.

We've always said personal shoppers are the secret to our pickup and delivery success, and that remains true. So, while the system retrieves the order for assembly, a personal shopper handpicks fresh items like produce, meat and seafood, and large general merchandise from the sales floor.

Once the order is collected, the system stores it until it's ready for pickup. This whole process can take just a few minutes from the time the order is placed to the time it's ready for a customer or delivery driver to collect.

We began piloting our first local fulfillment centerin Salem, New Hampshire, in late 2019. The technology is impressive. Equally impressive are the results:

• More availability: We are able to pick more orders and do it quicker, creating more availability for customers.
• Faster fulfillment: The system's speed can allow orders to be picked up or delivered within the hour.
• Greater efficiency: One local fulfillment center can fulfill orders for many stores, which means its benefits can be felt by customers in stores nearby.

We'll be building local fulfillment centers with various technology partners, including Alert Innovation, Dematicand Fabric. With these partners, we'll be testing different orientations and add-on innovations to understand what works best in different environments. For example, in some locations, we'll be adding on to our stores. In others, the fulfillment centers will sit inside the existing store footprint.

Finally, in some stores, we'll be adding automated pickup points. Think of it as the ultimate convenience that allows customers and delivery drivers to drive up, scan a code, grab their order and go!

It's no secret our customers love the speed and convenience of pickup and delivery. These local fulfillment centers help unlock our ability to expand even faster to meet their needs today, while also setting a new foundation to serve them in the future. We're excited about this new chapter for our business and what it means for our customers.