The COVID-19 pandemic has accelerated Walmart Canada’s digital transformation plans, pushing the company to invest $3.5 billion to build new distribution centres and renovate stores as customers adjust their shopping habits.
Walmart Canada (WMT) announced Monday that it will spend $3.5 billion over the next five years to expand its e-commerce capacity, build two new distribution centres in Ontario and B.C. and renovate more than 150 locations to become “smarter stores.”
“The coronavirus probably did more for digital transformation than any CEO out there,” Horacio Barbeito, Walmart Canada’s chief executive, said in an interview with Yahoo Finance Canada.
“Sometimes you have no choice but to go forward. One of the learnings from this crisis is having the agility and opportunity to be faster and accelerate where it matters for the customer.”
While many retailers across North America have been struggling amid the coronavirus pandemic, Walmart has experienced a spike in demand, particularly when it comes to e-commerce and grocery. In its most recent financial quarter, reported on May 19, the retail giant saw comparable sales jump by 10 per cent as customers purchased more items in fewer trips.
Walmart believes at least some of these consumers changes are here to stay, which is part of the reason for the $1 billion store renovations coming to 150 locations across the country over the next three years.
For example, the company plans on introducing larger self-checkouts that will be able to handle the bigger purchases customers are now making. Walmart also wants to reduce touchpoints at checkout, and will introduce technology that will allow employees to checkout customers anywhere in the store.
Technology will be deployed throughout the store, Barbeito said, to create a so-called “smarter store.”
“Customers will see a different layout proposition and a lot of digital interaction in the store,” Barbeito said.
“In general, it’s going to be a lot of technology that’s going to make life easier for our associates and deploy more associates to better serve customers.”
In Canada, Walmart’s e-commerce business reached volumes the company was not anticipating to hit for another two to three years, Barbeito said. Part of the $3.5 billion will go towards expanding Walmart Pickup program to 70 per cent of its stores by the end of 2020. The company will also test micro fulfilment centres in the backrooms of some of its supercentre locations, a pilot project it says will increase the speed of fulfilment for pickup and delivery.
Walmart Canada will also spend $1.1 billion building two new distribution centres – one in Vaughan, Ont. and another in Surrey, B.C. – while also renovating an existing facility in Cornwall, Ont. While Barbeito did not say how many new jobs will be tied to the facilities, he said the company typically employs between 500 and 2000 employees at its distribution centres, depending on the level of automation.