Marketplace is community-funded public service journalism. Give in any amount that works for you – what matters is that you give today.
We’re expecting record online sales this holiday season — Adobe predicts a 33% increase compared to 2019 — and that’s putting stress on retailers that never expected to handle this many packages at their fulfillment centers.
Walmart is converting 42 warehouses that normally ship products to its stores so it can also fulfill online orders.
It’s more complicated than it might sound. If you’re shipping products to stores, you tend to move stuff around in large units — pallets filled with cases of diapers or video games, for example.
“Those distribution centers are built for that physically, in terms of racking and forklifts and carts,” said Mark Lang, who teaches marketing at the University of Tampa.
But at a warehouse that fulfills online orders, “now pickers, they’re pulling individual units off.”
Workers take whatever you ordered — a package of diapers, a couple bars of soap — put it all in a box and load it onto a truck so it can eventually be delivered to you.
To do this, Walmart had to update its computer systems and set aside whole sections of its warehouses.
This is something Walmart can do because it has a lot of warehouses. Bryan Eshelman at AlixPartners said smaller retailers are taking a different approach, one they piloted this spring when the pandemic hit: using their stores to ship online orders.
“They literally put inventory in the aisles — aisles that would normally be reserved for customers — to set up almost like a mini distribution center in the store,” Eshelman said.
Meanwhile, Pepsi, which sells a lot of packaged foods around the holidays, just opened a small, fully automated warehouse outside Chicago, which it said can process orders seven and a half times faster.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.