Walmart online shoppers are finding it more difficult to order certain items — heavier products like detergent and pet food and bulkier multi-item orders that are expensive to ship — The Wall Street Journal reports.
That's the result of changes in the retail giant's fulfillment system designed to cut down on costs, according to the report, which cites unnamed executives of suppliers.
But the system does recommend alternative products for online customers to purchase instead of the items unavailable to them, Walmart e-commerce spokesperson Ravi Jariwala told the Journal. He also said that Walmart is leveraging an enlarged fulfillment system and experiments like limiting orders of bulky orders to nearby fulfillment centers to "bring the cost down." In an email to Retail Dive, Jariwala said he had nothing to add beyond what he told the Journal.
E-commerce fulfillment is the bane of any online retailer, which is why solving the last mile has emerged as e-commerce's Holy Grail.
Shipping and fulfillment costs are bedeviling all players, including Amazon, which has arguably set consumer expectations for fast and free shipping. The e-commerce giant's shipping costs rose 31% year over year in its most recent quarter, after rising more than 30% (and usually more than a third) in the last five quarters, according to its second quarter earnings report.
Amazon this year raised its Prime membership fee for the first time in a while, from $99 to $119, and CFO Brian Olsavsky defended the move saying, "The value of Prime to customers has never been greater. The costs are also high." But Amazon doesn't just have those membership proceeds coming in to cover its costs; it also has a formidable cloud services operation and growing advertising revenues to deliver much of its profits.
Walmart doesn't have any of that. The company for half a century has staked its own success on fiercely efficient retail distribution, playing hardball with suppliers and honing its supply chain to maximize profits. But it's a system based on legacy retail, where the customer supplies free labor to cover the last mile: taking items off shelves, bringing them to checkout, loading them into the vehicle and getting it all home.
Walmart has struggled to bring the same level of efficiency to its online sales, though it continues to experiment. Last month, the company revamped a pilot program, in which store employees deliver online orders. And, the company says it will have expanded its prominent in-store pickup towers to 700 stores by year's end.