Dive Brief:

• Joining other retailers in adding more distribution centers, Walmart announced last week it's opening a 925,000-square-foot automated fulfillment center in the fall of 2022 in Lebanon, Tennessee, to streamline its supply chain and e-commerce operations.
• The fulfillment center — marking the retailer's first in the state — will use AI software, robots and human associates to ship orders to customers. It will house millions of items that will be sent directly to customers as early as the next day, according to a company press release.
• The facility will use robots to find items within its storage system and bring them to employees for packing before shipping to customers. The company is hiring for a range of full-time jobs within the fulfillment center, including general manager, human resource manager and maintenance manager, per the announcement.

Dive Insight:

Walmart's plans for expanding its e-commerce fulfillment operations have been underway since earlier this year. In February, the retail giant said it planned to invest in its automated e-commerce fulfillment processes.

"Our automation plan is now ready to scale," CEO Doug McMillon said at the time of the announcement. "We'll be investing in our distribution centers, our e-commerce fulfillment centers and in market fulfillment centers, which will, in many cases, be inside of or built beside our stores." McMillion went on to say that there is a limit on how much the company can pick and deliver from stores and that "the automation that we're investing in will help change that."

Walmart is investing in an automated supply chain as it tries to bring in more customers to its Walmart+ subscription service, a competitor to Amazon Prime. Analysts estimate the retailer has added anywhere between 10 million and 35 million subscribers to the service, which touts free next day and two-day delivery.

"Walmart's fulfillment center in Wilson County will play an important role in our broader supply chain network, focused on fulfilling Walmart.com orders and supporting our promise of free next-day and two-day shipping," Steve Miller, senior vice president of supply chain operations, Walmart U.S., said in a statement. "We're thrilled to be opening our newest fulfillment center in the great state of Tennessee and look forward to a long relationship with the community of Lebanon."

As Walmart enhances its e-commerce distribution arm, other retailers, including Chewy, Target, ThredUp, Saks and The Home Depot, have also scaled up their fulfillment operations as online shopping continues to grow. According to a June report from CBRE, the U.S. must create 330 million square feet worth of warehouse space by 2025 to fulfill the rising e-commerce order volume.