ST. LOUIS — Walmart is a major player in online shopping and shipping speed is a large factor in making any purchase. Amazon is perhaps best known for its Prime service, which offers free delivery and expedited shipping. Now Walmart is expanding its parcel network, which is expected to increase shipping speed.
Customers may not notice it in stores, but the parcel stations will help Walmart customers get their online orders sooner. They plan to have over 40 parcel stations in stores by the end of the year, with many already operating for the busy holiday season. The goal is to expand the feature to more locations in 2024.
Walmart is using its 4,700 stores strategically. These stores, situated within 10 miles of 90% of the U.S. population, have transformed into more than just places to shop. They now serve as online fulfillment centers and delivery hubs, supported by a vast transportation and last-mile delivery network.
Currently, over 4,000 stores are operating as delivery hubs, handling various types of orders. The next step in their plan is to introduce parcel stations to these hubs. Parcel stations act like mini post offices, facilitating the quicker movement of goods to customers’ homes. This process utilizes Walmart’s private fleet to transport more online orders faster.
The parcel stations help give customers access to a broader range of items eligible for next-day delivery. They also help to lower the cost of delivery.
The competition between online and big-box retailers is heating up. Walmart offers a “plus service” like Amazon Prime that competes on price, speed, video streaming, returns, and other factors.
Amazon’s secret to shipping speed is logistics. Their fulfillment centers are big warehouses where workers pack orders. When you buy something, it goes through a process: packed in a fulfillment center, loaded on planes, organized by location, and then sent to your door.
Estimates put the number of Amazon fulfillment centers over 185 globally, with 100 in the U.S. Unlike Walmart, with many stores and warehouses, Amazon has a few big centers.
Starting with one in Seattle, Amazon expanded to cover whole regions, even states. This setup lets Amazon stock lots of stuff, quickly meeting diverse customer needs. Unlike Walmart, Amazon’s setup has allowed it to handle changes in demand a bit better. It will be interesting to see how this competition for customers shakes out.