Walmart tests dark stores closed to public to speed up online delivery

By Jaewon Kang

 

Walmart Inc. is testing dark stores, which resemble retail stores but are closed to the public, as a way to speed up deliveries. 

The company has opened one of these smaller warehouses in Dallas and plans to add another in Bentonville, Arkansas, where Walmart is based, according to people with knowledge of the matter who weren’t authorized to speak publicly.  Walmart is exploring adding more locations, the people said.

 

Faster delivery is a key priority area for Walmart, as shoppers are increasingly paying more to get their purchases faster. The dark stores aim to help the company cover a wider delivery radius and improve speed, as it seeks to better compete with Amazon.com Inc. and other digital giants.  

 

A Walmart spokesman said the company regularly tests new tools, features and capabilities with the goal of delivering a fast, smooth customer experience. 

 

The new dark stores will carry some of the most popular items that shoppers buy, amplifying the reach of existing stores and bigger warehouses that fulfill orders. Walmart operated a handful of similar warehouses during the mid-2010s through the pandemic before closing them. 

 

In recent years, the company has focused on expanding its digital operations by offering new services such as pharmacy delivery. Walmart has also broadened its marketplace for third-party sellers, adding more brands, expanding price points and entering new categories.  

 

Other retailers have also set their sights on fast delivery, which typically come with extra fees that help offset costs associated with online orders.  

 

Walmart expects its online business to hit profitability this year after investing billions of dollars to better compete with Amazon. To trim costs, the company has batched more orders together and is automating the retrieval and packaging of items in warehouses.