Walmart Canada launches $2.6 billion plan to upgrade DC operations for omnichannel

Walmart’s Canadian arm will spend $2.6 billion over the next five years on retail supply chain tools and processes intended to make both its online and in-store shopping experiences “simpler, faster, and more convenient,” the giant retailer said today.

Overall, the spending is designed to lead to a faster e-commerce experience, two new distribution centers to speed up the flow of products, re-invented and "smarter" stores, an enhanced omnichannel experience, and modern digital tools to ensure associates can best serve customers. The plan will enable the store to continue offering “everyday low prices” despite the rapid growth of its business in the grocery and e-commerce sectors, Mississauga, Ontario-based Walmart Canada said.

To achieve that goal, the company said its plan would increase speed and traceability in fulfillment operations by piloting "hybrid locations" that convert many of its large retail “supercenters” into facilities that include "micro fulfillment centers" in their backrooms. All in all, that initiative will expanding the full "Walmart Pickup" offering to approximately 270 stores – or 70% of locations – by end of 2020.

Also at retail sites, Walmart Canada will modernize its "stores of the future” by renovating one-third of its store network—totaling 150 stores over the next three years—to add features like expanded electronic shelf labels, shelf scanners to monitor product volumes, and robotics and computer vision cameras.

And in its warehouses, the company will dedicate $820 million of the total to build two new DCs and renovate an existing DC. Three examples of those changes will include: adding automation and technology at a Vaughan, Ontario, site through a deal with the Dutch material handling and logistics automation company Vanderlande; upgrading distribution logistics technology at a Surrey, British Columbia, site through a deal with German logistics solution provider Witron; and launching collaborative robots or “cobots” that will work in concert with associates handling apparel, health and beauty items at a Cornwall, Ontario, site by early 2021.

Finally, the plan will add: new warehouse management system (WMS) software; telematics and "internet of things" sensors attached to 2,200 delivery trailers; artificial intelligence (AI) for improved demand planning; and blockchain solutions for transportation payments systems.

"The retail business is as dynamic as ever and this investment ensures we're developing a supply chain that is the envy of the world,” John Bayliss, senior vice president, Logistics and Supply Chain, Walmart Canada, said in a release. “The better the supply chain, the quicker our customers can get the products they want. This investment will transform our supply chain and create hundreds of Canadian construction jobs along the way.”

Editor's note: This article was revised on July 21 to convert Canadian dollars to U.S. dollars.