Walmart Canada investing in ecommerce automation

Date : 03 March 2021

Stewart Samuel

Program Director - Canada

As part of its five-year $3.5bn investment plan, Walmart Canada is set to open its first store featuring automated micro-fulfillment and automated pickup kiosk for grocery ecommerce.

Investing in stores, supply chain and technology

Walmart Canada outlined its investment plan last year, with a focus on its stores, supply chain and technology. Several of the new elements came to life at its new store in Vaughan, Ontario at the end of 2020, including a 10,000-square-foot omnichannel fulfilment space, a large drive-up pickup area, and the use of more efficient and modern technology to support fulfillment. Ecommerce has become a priority area given the strong growth the retailer is experiencing, with sales up 229% in the last quarter.

Picking speeds up to six times faster

The latest iteration of Walmart’s omnichannel store concept will debut at its Supercentre in Scarborough, Ontario. The retailer is partnering with Dematic to develop a 22,000 sq ft space for automated micro-fulfillment, enabling picking speeds up to six times faster than manual store picking. The space will also feature automated kiosks that serve as vending machines for online grocery orders. These can serve up to five customers simultaneously. The retailer has previously tested similar kiosks in the US, while earlier this year it announced that it was accelerating its automated micro-fulfillment programmes with a range of partners, including Dematic. In addition to improving the customer experience, these innovations will also support the retailer's efforts to lower costs. 

Improving reach and access to its offer

As part of the investment plan, Walmart Canada will also expand grocery pickup to 60 more stores this year, with 85% of the network offering the service by the end of the roll-out. It is also expanding its own delivery service, along with its partnership with last-milers such as Cornershop and Instacart. Walmart is also doubling the number of stores equipped with ship-from-store capabilities to 30, enabling faster deliveries for customers. The retailer is also increasing the range of general merchandise items and clothing that can be shopped online for on-demand fulfillment by 20%. This also mirrors a programme the US rolled-out last year.

Partnering for growth

Having been on a relatively slow-burn, the grocery ecommerce channel accelerated significantly in Canada last year, more than doubling to an estimated $4.0bn. This is expected to remain flat in 2021, as retailers focus on retaining the gains made and improving operational execution, before returning to growth in 2022. All the major retailers are investing in this area, including Loblaw which has partnered with Takeoff Technologies for automated micro-fulfillment, Sobeys which has formed a strategic partnership with Ocado and Metro which has expanded capacity through working with Cornershop and is developing its first dark store.

Retail Analysis subscribers: outlined in our report, North America retail outlook 2021, we highlight five key trends set to shape the North American retail marklet this year, including improving ecommerce profitability.

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