Walmart's Asda Chain Bets A Billion On E-Commerce

Walmart's (NYSE:WMT) U.K. grocery subsidiary, Asda, will spend $1 billion (£700 million) on its online, supply-chain and click-and-collect efforts, along with some store redevelopment, Internet Retailer reported.

The click-and-collect program, which lets customers buy groceries online and pick the order up in-store, started last fall and this year will be rolled out to all 568 Asda stores. The program will also be expanded to include non-grocery merchandise, and customers will be able to pick up orders at 200 other locations, including lockers located at Asda gas stations. Asda claims the service now accounts for about 4 percent of all online U.K. grocery sales.

Another chunk of that billion will go to opening a new 120,000-square-foot fulfillment center near Nottingham, 120 miles north of London. Unlike typical U.S. fulfillment centers, where the only outsiders are filling delivery trucks at the loading dock, the new facility will also let shoppers pick up online purchases, including ready-to-eat meals such as pizza.

That last idea seems like it's just crazy enough to work. Traditionally, bricks-and-mortar grocers have kept plenty of distance between distribution centers and stores. But the solid line between the two was already starting to blur with big-box grocers (a typical Costco (NASDAQ:COST) looks a lot like a DC that was somehow invaded by shoppers) before omnichannel began to reverse even more standard retail rules.

Stores are already being turned into fulfillment centers. If an actual fulfillment center isn't that far from the customer, why not let them save the chain a delivery? And as long as they're there, why not throw in ready-to-eat food as an option? What doesn't work will just be written off. But the parts that do work? They'll likely be showing up in a couple years at a Walmart fulfillment center near you.

For more:

- See this Internet Retailer story

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