Key Takeaways
- Walmart expanded sub-30-minute delivery to 38 U.S. markets and grew fast delivery 48% during the quarter, with stores serving as last-mile fulfillment nodes for 80% of e-commerce orders.
- More than 50% of Walmart’s e-commerce fulfillment volume now runs through automated facilities, and CEO John Furner calls fast delivery an “acquisition strategy” tied directly to Walmart+ membership growth.
Walmart focus on getting an order to a customer’s doorstep in less than 30 minutes has doubled in the last quarter.
Walmart has expanded sub-30-minute delivery to 38 U.S. markets, up from an initial launch of 33 markets in May. Fast delivery in the U.S., including fashion, general merchandise, groceries and medicine, grew 48 percent during the quarter.
Walmart’s online business has remained a bright spot for the U.S. based retailer in part due to the strong delivery network, tied to their ability to offer customers speedier fulfillment, according to company officials. Expedited deliveries of less than three hours represented about 37 percent of store-fulfilled orders.
How Walmart’s Stores Power Faster Digital Fulfillment
Investing in technology and tech-powered solutions have helped make the Walmart experience faster, more convenient and personalized – while expanding the number of occasions where the company can serve customers.
“The more omni we become, the more important our stores become,” according to chief financial officer John David Rainey during the company’s earning call last month. “Between in-store shopping and digital fulfillment, we have more unit volumes transacted through our stores than ever before as they are the last-mile fulfillment nodes for 80 percent of our e-commerce orders and 100 percent of our fast deliveries.”
Why Store Proximity and Automation Boost E-Commerce Margins
Walmart’s stores put inventory and associates within 10 miles of 95 percent of the U.S. population, a key driving force of why the Arkansas-based company is prioritizing capital into the infrastructure behind the service.
The company’s U.S. e-commerce business generated double-digit incremental margins in the first half of the year, helped by greater delivery network density, growth in fee-based fast delivery and automation. The retailer has 3,100 U.S. stores with some level of automated freight, while more than 50 percent of its e-commerce fulfillment volume is processed through automated facilities.
CEO John Furner added the retailer’s physical footprint and fulfillment infrastructure allow it to put inventory closer to customers while maintaining an “attractive” cost structure.
“Speed is not simply a fulfillment metric; it is an acquisition strategy,” said Furner. “Customers who use fast delivery shop with us more frequently, they deepen engagement with us, and they are more likely to become Walmart+ members.”