Source: Walmart

Walmart has been slashing U.S. delivery costs by automating its supply chain – including automation in more than 50% of its fulfillment center volumes.

Increased automation and more efficient driver routes helped the retail giant accomplish the feat for the third consecutive quarter. In fact, Walmart has significantly reduced its U.S. net delivery cost per order by 40% in Q3 2024 for the third consecutive quarter, according to Executive Vice President and Chief Financial Officer John David Rainey during an earnings call on Nov. 19.

“There are a few key factors driving this improvement: delivery densification, increased penetration of paid expedited delivery orders and the automation of our supply chain,” says Rainey.

As Walmart scales its store fulfilled delivery business and expands its catchment areas, the mega-retailer has experienced significant improvement in batch density with orders per delivery up 20%, Rainey adds: “In addition, the popularity of expedited delivery has resulted in more than 30% of orders coming from customers and members that elected to pay a convenience fee to receive their delivery in less than one hour or less than three hours.”

And lastly, Walmart continues to make progress in the automation of its supply chain, as now more than 50% of the company’s fulfillment center volume is automated - which is twice as much at this same time last year. This has the obvious benefit of lowering the per unit cost of delivery. These factors contributed to the third consecutive quarter of approximately 40% reduction in U.S. net delivery cost per order, according to Rainey.

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