Enhanced warehouse systems and competitive shipping - learn from Walmart's moves to catch Amazon

6 March 2017 / by Chris Anton, Executive VP for Snapfulfil North America

Amazon, mighty Goliath in the world of e-commerce retail, has yet to find a competitor it couldn’t out smart. However, perennial challenger Walmart isn’t backing down from the fight. 

Going on 55 years of business, Walmart is reshaping its entire strategy to better serve the on-demand consumer. Focusing more on what the company can do to improve experiences for online customers versus solely brick and mortar shoppers, Walmart continues to make significant investments throughout its e-commerce efforts. In fact, according to ZDNet, Walmart expects spending on its e-commerce and digital initiatives to total approximately $1.1 billion in 2017. While certainly nothing to sniff at, that’s still a drop in the bucket compared to Amazon, which was reported to have invested $3 billion in 2016 to fuel its e-commerce engine in India alone. Nevertheless, Walmart’s new shipping policy may inch the retailer even closer to its dominant competitor. 

Watching two industry giants duke it out on the global stage is interesting for sure. But analyzing and applying the operational chess moves made by these two offers real insight to even smaller firms. Late last month Walmart launched a bold strike against Amazon Prime, announcing it would be providing free expedited shipping for online orders totaling more than $35 – no membership fee required. For consumers, that’s seemingly more convenient than paying a $99 annual fee for essentially the same service with Amazon – even with all the add-on bells and whistles it may come with. 

Walmart’s ability to go head-to-head with Amazon on expedited shipping didn’t just happen overnight though. Walmart has been laying the groundwork to ensure its supply chain infrastructure could handle the rigor. Key to this was increasing the number of warehouses it needed to support e-commerce growth and speed to market demands. According to Reuters, in Q4 of last year, Walmart was on track to double its number of warehouses dedicated to online sales to 10 by the end of the year. In addition to the added space, Walmart also implemented new automated product sorting and enhanced its item tracking, which supply-chain consultants believe put Walmart on par with Amazon's robot-staffed facilities.

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The lesson that can be gleaned from Walmart’s example is that it truly takes innovation and out-of-the-box thinking on the back-end to remain competitive on the front-end with consumers. In other words, adopting better processes and technology in the warehouse can be the linchpin to differentiating your e-commerce business. 

Now more than ever, e-commerce retailers should trade in manual processes and legacy systems for cloud-based warehouse management software. With online sales projected to grow between 8 percent and 12 percent this year and two-day shipping – next day in the UK - fast becoming the new normal for consumers, all e-commerce retailers – large and small – can benefit from optimization in the last mile of the supply chain. 

The right cloud WMS will provide greater insight, identifying cost savings in areas like inventory and labor so you can reinvest in your e-commerce operations like the Walmarts and Amazons of the world. Moreover, the real-time data offered through advanced software for warehouse management makes everything from receiving and put away to picking, packing and shipping much more efficient. Ultimately, this translates into happier customers as orders are fulfilled with greater accuracy and speed. 

Walmart realized the time for change in its warehouse and supply chain strategy is now. What about you? How will you take a page out of Walmart’s book and better support your customer’s order fulfillment needs?

 

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