Walmart’s U.S. business is seeing improved operational efficiency from automation investments in its supply chain, the company announced in its third-quarter earnings statement Thursday, according to Supply Chain Dive.
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More than 60% of Walmart’s U.S. stores receive a portion of their shipments from automated distribution centers, and more than half of its e-commerce fulfillment center volume moves through automated systems. The company said the increased use of automation leads to improved productivity on a per-unit basis.
“It translates into lower shipping costs,” Executive Vice President and Chief Financial Officer John David Rennie said of automated fulfillment on an earnings call Thursday. “Our shipping costs have been down consistently for several quarters in the 30% range. This was another quarter where we saw double-digit improvements, and that really helps our e-commerce economics, but it also helps the overall SG&A for the company.”
Although Walmart has made progress in its push to implement automation, the retail giant is still in the “early innings,” David Gogina, executive vice president and head of Walmart’s U.S. e-commerce division, said during a Goldman Sachs conference in September. The company is deploying automated technology within its perishable and non-perishable distribution networks, but has come a long way in the implementation process at its fulfillment centers, where products are shipped to customers.
“They are twice as productive as the old fulfillment centers,” Gogina said, referring to the newer automated fulfillment centers. “They are becoming more capable over time as we continue to bring more and more robots into different operations.”
Walmart has launched several “next-generation” fulfillment centers since 2022 that feature automated technology, and another is scheduled to open next year. The company said in its latest annual financial report, submitted in March, that it operates 29 facilities dedicated to meeting e-commerce needs.
Walmart stores are also playing an important role in its evolving fulfillment efforts. The retailer recorded a nearly 50% jump in deliveries fulfilled in-store in the third quarter, according to an earnings presentation. About 35% of orders fulfilled in the store were delivered in less than three hours, which is roughly a third the company reported in August.
Source: Market intelligence platform IndexBox
