The coronavirus pandemic has conditioned consumers to shop online, and retail giant Walmart is reacting to what it sees as a permanent consumer shift by realigning many of its distribution centers to handle internet-related sales.
"We saw an acceleration of the conversion to e-commerce — what we anticipated would occur over three years actually occurred over a period of eight months," Greg Smith, Walmart's executive vice president of supply chain, said during last week's groundbreaking for a new import distribution center off Interstate 26 near Ridgeville.
"We're seeing more and more people who are having a great experience and are converting to e-commerce, so we think its a phenomenon that will continue to accelerate," Smith said.
Greg Smith, Walmart's executive vice president for supply chain, talks about the retailer's $220 million import distribution center to be built in Ridgeville during a groundbreaking event Thursday. Stephen Blackmon/Provided
The $220 million project, scheduled to open in about 14 months, will include 3 million square feet of space and employ 1,000 workers. It's being built at a time when retail imports are increasing at the Port of Charleston because of the surge in online buying.
Walmart reported last month that e-commerce sales increased by 79 percent during the third quarter, pushing overall net sales to $29.6 billion and net earnings to $5.14 billion — 56.2 percent better than last year.
"We’re convinced that most of the behavior change will persist beyond the pandemic and that our combination of strong stores and emerging digital capabilities will be a winning formula," CEO Doug McMillon told investors during a conference call.
To meet that growing demand, Walmart has converted roughly 40 of its traditional distribution hubs serving brick-and-mortar stores to include space dedicated to the online side of the business, Smith said.
"We have significantly increased the capacity and the number of (e-commerce) locations," he said, adding industry analysts expect e-commerce sales to continue increasing 20 percent or more per year for the next five to 10 years.
"It's an easy way of commerce and the satisfaction rate for deliveries has been very positive," Smith said. "So I really don't see why we wouldn't continue to experience the same kind of penetration and growth."
The Ridgeville site will be Walmart's seventh import distribution hub. Such facilities typically receive cargo containers from overseas — in this case, brought through the Port of Charleston — and then unpack the items to forward to regional distribution centers that feed local stores.
"Ultimately, this facility will serve six regional distribution centers and 850 of our stores and Sam's Clubs," Smith said. In addition to the roughly 120 Walmart and Sam's Club stores in South Carolina, the Ridgeville site will prepare shipments for locations throughout the Southeast.
While the Dorchester County center initially won't be a "fulfillment center" that fills online orders for delivery to individual shoppers, Smith isn't ruling it out.
"We are starting to merge our e-commerce and our physical store assets from a distribution standpoint," he said. "This center will very much bring products in and move products for e-commerce, but first and foremost to the fulfillment centers that then service the last mile. But it could potentially play a role in fulfillment as we look at the overall network in years to come."
Volvo Cars CEO Hakan Samuelsson greets Gov. Henry McMaster during the June 2018 debut of the redesigned S60 sedan at the automaker's $1.1 billion campus near Ridgeville. Anderson Gustafsson, head of U.S. operations, is to the right. Provided/Volvo Cars
Electric slide
Volvo Cars is fast-forwarding into the electric vehicle future with plans to offer only electrified vehicles by the start of the next decade.
"I would be surprised if we wouldn't deliver only electric cars from 2030," Hakan Samuelsson, the automaker's CEO, said during the Financial Times' Future of the Car summit last week. The plan would include the S60 sedan Volvo builds at its $1.1 billion manufacturing campus near Ridgeville and the popular XC90 SUV that will be built at the plant for the 2024 model year. Volvo is already building an electric battery plant at the Berkeley County site off Interstate 26 in preparation for the electrified production.
"We are determined to be the first premium car maker to move our entire portfolio of vehicles into electrification," Samuelsson has said. "This is a clear commitment towards reducing our carbon footprint, as well as contributing to better air quality in our cities."
Currently, Volvo offers a hybrid gas/electric option for all its vehicles, including the S60.
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