Walmart Canada Plans $2.6B E-Commerce and Distribution Push
Walmart Canada plans to spend CAN $3.5 billion (US $2.58 billion) over the next five years to better tie together physical and digital shopping, reduce payment friction, and make distribution and fulfillment more efficient.
Most of the money will go toward distribution centers, both new construction and upgrades. Even so, the entire investment plan speaks to larger trends in food retail, and could help the chain better compete against Amazon and other rivals.
The investment effort is not only a well-funded initiative designed to propel Walmart Canada into the future, but also stands as one of the most detailed commerce plans yet released by the retail chain. Walmart Canada said that the investment will touch upon every aspect of its business and speed up e-commerce for consumers, including deliveries. The investment push also will result in what the retailer called “smarter” stores and a better omnichannel retail experience overall.
“As Walmart Canada's business grows – especially with grocery and e-commerce picking up significant momentum – Walmart will not compromise on offering the everyday low prices customers trust – both online and in-store,” the chain said.
Money will go toward the renovation of more than 150 stores over three years — that represents more than a third of the Walmart Canada store network. Walmart Canada operates about 400 store and services some 1.2 million customers each year. According to the Progressive Grocer’s 2020 PG 100 list of the top food retailers in North America, Walmart Canada has annual revenue of about $18.4 billion, down 1.04% from the prior year.
"We need to do everything we can to delight our customer every single time they choose to shop with us, whether it's online or in the store. We're challenging ourselves to be better and be relentlessly focused on excellent omni customer service and experience," said Sam Wankowski, COO for Walmart Canada. "This means better stores, quicker service and doing what Walmart does best – focusing on customers, always at Walmart's everyday low prices."
Mobile Payments and 'Hybrid' Stores
Stores will gain such features as expanded electronic shelf labels, shelf scanners to monitor product volumes, robotics and computer-vision cameras to simplify, minimize touches, and maximize efficiency and accuracy. Computer-vision technology, in fact, is a big part of digital efforts in the broader world of retail, and are helping to power such emerging tools as cashier-less checkout. Amazon Go — operated by one of Walmart’s main rivals — provides an example of that.
As for Walmart Canada, it plans to create what the division has called “a new checkout experience to reduce touchpoints, including tap to pay, new bigger self-checkout and ‘Check Out With Me’ mobile payment technology to allow associates to check out customers anywhere in the store.”
Walmart Canada said it will also expand its Walmart Pickup offering to 270 stores, or 70% of its locations, by the end of this year. The retailer aims to provide better advance notification for consumers using pickup, which promises to speed up the process. The investment reflects the wider race in food and other types of retail to improve curbside pickup services — programs that succeed or fail based on speed and efficiency, as recent research documents.
The retailer also will test “hybrid locations” as well — they are defined as “supercenters with micro fulfillment center” in their backrooms to increase the speed of fulfillment for pickup and delivery.” That part of the five-year investment program also reflects broader trends in retail, including for grocery, as more shoppers turn to online and mobile channels, especially during the pandemic.
New Distribution Centers
Walmart Canada will earmark some CAN $1.1 billion (US $812.8 million) to build two distribution centers. The retailer will build a 555,000-square-foot facility in Vaughan, Ontario, with the opening set for 2024, and a 300,000-square-foot facility will open in Surrey, British Columbia, in 2022. Additionally, the retailer will update a distribution center in Cornwall, Ontario, with new automation technology and other features by 2021.
Money also will go toward Internet of Things (IoT) technology, another emerging area for the broader world of retail. Specifically, Walmart Canada will deploy digital sensors in some 2,200 trailers to gain more real-time information about deliveries, data that can speak to “the quality and freshness” of transported goods.
Other investment efforts include:
- Launching artificial intelligence software in partnership with o9 to more accurately predict and better plan volume to ensure Walmart's customers get what they want, when they want
- Scaling the blockchain transportation payments platform with Toronto-based DLT Labs – the world's biggest blockchain solution for transportation payments systems
- Using new machine-learning training software to support improved training and safety on the front lines of the company's distribution center and fleet operations with Axonify, a micro-frontline learning company. Waterloo, Ontario-based Axonify also "helps approximately 100,000 hard-working Walmart employees (in the U.S.) increase their knowledge of corporate safety and compliance procedures as well as improve performance behaviors using a fun, fast and personalized approach to learning." Axonify also is active with other food retailers.
"The retail business is as dynamic as ever, and this investment ensures we're developing a supply chain that is the envy of the world. The better the supply chain, the quicker our customers can get the products they want. This investment will transform our supply chain and create hundreds of Canadian construction jobs along the way," said John Bayliss, SVP, logistics and supply chain at Walmart Canada.