Walmart Canada Invests $110 Million for Online-Focused Physical Upgrades

New omnichannel stores will respond to increased online demand and highlight improved fulfillment methods.

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Need to Know

  • Walmart Canada will pilot 10 stores with expanded omnichannel fulfillment space to accommodate online orders for pick-up or delivery.
  • The company is investing $110 million for in-store renovations.
  • The focus will be on improving in-store picking and fulfillment for online orders as Walmart tries to move towards models that emphasize its massive physical footprint.
  • Walmart U.S. initially piloted the in-store e-commerce test, converting four of its brick-and-mortar locations into omnichannel test centers in October.

Analysis

As online retail continues to boom, Walmart Canada is following the lead of its U.S. counterpart, investing in the launch of e-commerce testing stores that will increase the speed of in-store product fulfillment.

Walmart Canada announced it would be investing $110 million towards converting 10 stores to high-tech omnichannel fulfillment centers. This will allow the company to increase the speed of fulfillment for pickup and delivery orders, as the popularity of online ordering continues to surge amid the COVID-19 pandemic. Walmart Canada will also carry out more than 130 store renovations in the next few years to make new floor space for e-commerce capabilities; 19 such renovations will take place this year.

“In these busy and challenging times, we know customers want choice and convenience more than ever,” Horacio Barbeito, president and CEO of Walmart Canada, said in a statement. “This is a very exciting time at Walmart Canada, as we invest in the business, accelerate our omnichannel efforts and make the shopping experience easy and simple for our customers.”

Walmart Canada’s commitment to the new omnichannel stores is part of the company’s overall $3.5 billion investment in improving overall business operations. The company’s U.S. wing unveiled its omnichannel testing centers in October, which use tweaks to online vs. in-store inventory, AR inventory-sorting capabilities, and an optimized checkout experience. Walmart Canada did not specify whether it would be bringing these capabilities to its stores. An existing hybrid concept store, in Vaughan, Ontario, will act as an incubator to test future omnichannel capabilities and features.

Walmart’s commitment to e-commerce innovation in Canada extends beyond the ten omnichannel fulfillment centers. The store also plans to expand its Grocery Pickup program to 70% of Walmart locations by the end of 2020, and enable mobile check-in for grocery orders, speeding up the pickup process. In addition, the minimum order for grocery pickup will be reduced from $50 to $35.

Walmart saw a massive surge in online sales this year, with e-commerce sales rising by 97% year over year in Q2. With more shoppers turning online, and fewer people visiting brick-and-mortar stores due to the pandemic, Walmart’s significant real estate space—the average store is more than 200,000 square feet in size—is primed for an online-focused makeover.

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