Wal-Mart is by far the leading retailer in the United States and in terms of total worldwide revenues. Yet, it lags behind Amazon.com when it comes to online sales. In 2012, Amazon.com generated online revenues of $61 billion, while Wal-Mart’s online revenues were just $8 billion. As a result, Wal-Mart is spending considerable resources to improve the situation.
According to Shelly Banjo, reporting for the Wall Street Journal:
“Amazon.com 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. 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. 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.”
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Photo by Wesley Hitt for the Wall Street Journal