Walmart, Home Depot Relying More On Physical Stores To Complete Online Orders

Image courtesy of Nicholas Eckhart

Walmart’s recent $3 billion acquisition of e-commerce company Jet.com may have been the retailer’s way of spurring its online business, but the largest retailer in the world has already been mingling its physical stores with its online presence. Much like fellow big box store, Home Depot, Walmart has increasingly used its vast network of stores to fulfill online purchases. 

Business Insider reports that in addition to five large distribution centers and 100 small e-commerce facilities across the country, Walmart now uses 80 of its 4,500 stores in the U.S. as areas to pack and ship orders placed online.

As with its purchase of Jet.com, Walmart appears to be using its physical store order fulfillment as a way to keep up with Amazon, which has 180 fulfillment centers across the country.

By using the physical stores, Walmart is able to spread out orders, matching inventory to the area in which orders are being shipped. This could also help the company in fulfilling its Amazon Prime competitor — the $50/year Shipping Pass, which offers two-day shipping on products.

Like Walmart, Home Depot has begun to rely more on its physical stores to package and either ship or hold online orders for pickup.

About 42% of the retailer’s online orders are picked up at physical stores, Business Insider reports.

That figure will likely grow, CEO Craig Menear says, with the complete launch of “BODFS,” or “buy online and deliver from store.” The program allows customers to pick a shortened delivery option that sends orders directly to a local store.

So far, BODFS has launched at 700 of Home Depot’s 2,200 stores.

The system seems to be a bit of a contrast from Home Depot’s previous push to cut back on the amount of inventory it holds in-store.

In June, the retailer said it would start keeping inventory levels flat or slightly down, and instead depend on distribution centers for online sales.

Home Depot and Walmart are using one huge advantage to go after Amazon [Business Insider]