For more efficient shipping, Wal-Mart is creating a system that uses workers in stores to pack items and send them to customers. The WSJ's Shelly Banjo tells Michael Arnold why Wal-Mart is lagging behind Amazon, the e-commerce leader.
Amazon.com Inc. AMZN -0.17% has become the runaway leader in online sales thanks to a network of more than 40 U.S. warehouses, some employing robotic assistants, which speeds orders to homes with ruthless efficiency.
As it seeks to play catch-up in e-commerce, Wal-Mart Stores Inc. WMT -2.15% has concluded it doesn't want to simply clone Amazon's model since it also has to worry about supplying its stores.
Instead Wal-Mart is creating a vast new logistics system that includes building new warehouses for Web orders, but also uses workers in stores to pack and mail items to customers, because Wal-Mart has determined it is faster and cheaper to send some shipments from its more than 4,000 U.S. stores.
"We're starting to gain traction," Chief Executive Mike Duke declared during the company's annual meeting this month. "I say starting because we know that it's an area we still have a long ways to go."
Wal-Mart is being forced to invent its own solution because it still hasn't figured out how to economically deliver all its products into the hands of online shoppers, current and former executives say. It is a remarkable admission for the Bentonville, Ark., company, which became the world's largest retailer in part by the efficiency of its supply chain.
Despite countless promises to become an online force since it got into e-commerce a decade ago, Wal-Mart has fallen far behind Amazon.Last year, Amazon posted Web sales of $61 billion, compared to an estimated $7.7 billion for Wal-Mart, according to trade publication Internet Retailer.
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