Walmart Testing Dark Stores to Provide Faster Delivery to Customers

Walmart is reportedly testing the use of dark stores to provide faster delivery to customers.

The company has opened a dark store in Dallas, plans to add one in Bentonville, Arkansas, and is considering adding more locations, Bloomberg reported Tuesday (June 24), citing unnamed sources.

Asked about the report by Bloomberg, a Walmart spokesperson said the company regularly tests new ways to enhance the customer experience, according to the report.

Dark stores are smaller warehouses that are closed to the public and carry popular items in order to support a wider delivery radius and faster deliveries to customers, the report said.

Walmart opened a few such stores in the mid-2010s but closed them after the pandemic, per the report.

The company said in November that consumers were showing resilience while prioritizing delivery speed and convenience.

Walmart Chief Financial Officer John David Rainey said during a Nov. 19 earnings call that the company’s eCommerce margins were benefiting from its delivery densification, increased penetration of paid expedited delivery orders, and automation of the supply chain.

“As we scale our store-fulfilled delivery business, we’ve seen significant improvement in batch density with orders per delivery up 20%,” Rainey said. “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.”

The focus of Walmart and other retailers on logistics signals a shift in their perception of delivery infrastructure from cost center to competitive differentiator, PYMNTS reported in April.

In May, Walmart opened its largest centralized prescription fulfillment facility and said it planned to add two more. The facilities use automation to streamline every step of prescription fulfillment, allowing pharmacists in Walmart stores to devote more time to clinical services.

In April, Walmart President and CEO Doug McMillon wrote in his annual letter to shareholders that the company plans to be able to deliver to 95% of Americans within three hours by the end of the year.

This delivery capability will be enabled by Walmart’s investments in technologies throughout its supply chain, which support both its stores and its eCommerce business, McMillon wrote.