Walmart to Spend up to $1.5 Billion on E-Commerce (Oct. 16, 2014)
Merchants continue reshaping their strategies to meet the demand for online shopping, and the latest to do so in a significant way is Walmart. This week, the retail heavyweight said it would build fewer large “supercenters” over the coming years, instead investing in e-commerce, the fastest-growing portion of its business. Walmart projected its e-commerce sales could reach $35 billion by 2018, up from $10 billion in 2013.
“We will change the mix of our capital spend through reductions in areas we have invested in historically to fund investments in new growth opportunities,” said Walmart CEO Doug McMillon, in a conference call with investors on Wednesday. The company plans to spend between $1.2 billion and $1.5 billion on building up its e-commerce business next year, compared with just $400 million this year. To bolster its online order processing capabilities, Walmart said it will build two 1.2 million-square-foot distribution centers next year. Those facilities—in Atlanta and Bethlehem, Pa.—join three warehouses the company built this year to handle Web orders.
Walmart’s push to beef up e-commerce comes as online mega-merchant Amazon continues its foray into the brick-and-mortar space. Amazon this week announced it would open two pop-up retail shops, possibly as soon as next week, in San Francisco and Sacramento, Calif. That news followed the company’s announcement of a physical location in New York City, which will serve as a pickup and distribution center for online purchases.
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