It’s no secret that nearly all major retailers have invested in online grocery services. However, these retailers are now competing to have the best online grocery services. As Amazon continues to lead the pack with an 18 percent share of the online grocery market, other retailers are looking to the e-commerce giant for inspiration. This might be why retailer Walmart has announced their plan to invest $41 million in building a new e-commerce fulfillment center in Bullitt County, Kentucky.
According to the company, this new fulfillment center will create 400 new full-time jobs and will be dedicated to fulfilling online orders through Walmart.com and the company’s subsidiary Jet.com. Walmart will be leasing a 720,000-square-foot-building in the Velocity 65 trade center located on Velocity Way. Once the center opens this fall, the company plans on hiring hundreds of temporary and seasonal workers as well.
“We are excited to welcome Walmart and Jet.com’s distribution facility to Bullitt County and the commonwealth,” said Kentucky Governor Matt Bevin in a release. “This is a major new venture for the company that will bring significant investment and hundreds of jobs to the region. It is further confirmation that Kentucky is the established leader for logistics and distribution in the United States.”
This move comes as the retailer continues to make aggressive moves against Amazon and other online retailers. Amazon’s fulfillment centers are known to be top of the line with robots and employees working side by side. With over 75 fulfillment centers and 25 sortation centers across North America, Amazon handles millions of orders a day. Walmart hopes to keep up with the introduction of their new Kentucky facility.
“This new facility will soon be serving even more Walmart.com and Jet.com customers with fast shipping in two-days or less, and we’re thrilled we found a home for it in Bullitt County,” said Nate Faust, senior vice president of supply chain, Walmart eCommerce U.S. “We look forward to opening for business and to a long relationship with the people of Kentucky and Shepherdsville.”
However, this isn’t the only fulfillment center that Walmart will be opening in the near future. Earlier this summer, the company announced its plans to open another fulfillment center in the Bronx neighborhood this fall. This New York-based fulfillment center will be testing out same-day delivery for Jet.com, which was acquired by Walmart two years ago. Walmart also decided to close down 63 Sam’s Club stores during the beginning of the year so that they can convert them into new e-commerce fulfillment centers. So it seems that Walmart is catching up to Amazon in terms of online shopping fulfillment centers.
Nevertheless, success in the digital retail space does not rely on fulfillment centers alone. This is why Walmart has been investing in improving their digital services as a whole. In June, the company introduced a premium text-message-based shopping service called Jetblack, which allows shoppers to communicate with a digitized personal shopper for their shopping needs. More recently, the company made headlines for testing out self-driving cars at their Chandler, Arizona location. In a partnership with Google’s self-driving car company, Waymo, Walmart is transporting online shoppers to their store with automated cars in an effort to improve their online grocery services. The company has also partnered with Google Express so that consumers can make online orders from Walmart through Google Home devices and smartphones that are equipped with Google Assistant, which is available in over 400 million devices. In addition, the company is also looking into checkout-free technology – similar to Amazon Go’s ̶ with a potential partnership with Microsoft, who is currently developing their own version of the technology.
Such investments make sense when you consider the fact that the online grocery trend is expected to continue to grow in the food industry. In fact, Nielson and the Food Marketing Institute (FMI) estimate that 70 percent of consumers will be buying groceries online by 2024. As more competitors enter the online grocery space, it will be interesting to see what other types of investments major retailers such as Walmart and Amazon will make in order to stay relevant.