Walmart Inc (WMT) is making a much bigger play for New York City via its jet.com e-commerce unit.
The retailer, which does not operate a single namesake store within the five boroughs of the city, is opening a fulfillment center in The Bronx, its northernmost borough, this fall for jet.com, the urban-focused e-commerce company it bought two years ago for $3 billion. (Walmart Inc. Technically operates a New York City store since it owns the Bonobos chain, which has a few small locations in the city, but there are no stores under its namesake banner.) The news was first reported by the Wall Street Journal.
The Bronx facility will initially only handle Jet.com orders and merchandise, but given the role the e-commerce high flyer has played in modernizing Walmart’s digital efforts, it seems likely it will eventually deliver Walmart.com orders too. The company wants to use the facility to build its ability to offer faster same- and next-day grocery delivery in New York City. In September, Walmart U.S. E-commerce CEO Marc Lore, who founded Hoboken, N.J.-based jet.com, said the retailer planned to offer same-day delivery in New York City, so this Bronx facility would go a long way to helping achieve that. Jet will use delivery service Parcel, which it bought last year.
Since buying jet.com in 2016, Walmart has refined the unit’s role in expanding its digital sales, which rose 33% last quarter, focusing it on more affluent shoppers in cities, areas where Walmart has a more limited presence. The facility will help jet.com with faster grocery delivery, where it can expect intense competition: arch-rival Amazon.com offers super fast delivery via its Prime Now membership services, and since its acquisition of Whole Foods last years, it is well established with physical locations in the country’s largest cities. Jet.com will deliver everything from weekly groceries to iPhones to New Yorkers. Target is offering same-day delivery for certain items bought in store in New York and other big cities.
After an e-commerce growth slowdown last holiday season, Walmart has promised to speed up sales gains and said it expects its online business to rise 40% this fiscal year.