Walmart (NYSE: WMT) has done it again. The retail giant cut its US delivery costs per order for the third consecutive quarter; this time by a whopping 40%.
The secret sauce? A combination of automation, smarter delivery routes, and a steady focus on meeting customer demands.
Walmart’s Q3 earnings
Walmart’s Q2 focus was on expanding ventures like its marketplace, advertising, and membership services.
Now, Q3 is all about its ability to balance growth and operational efficiency.
Let’s break it down.
1. Automation in Walmart’s supply chain
Walmart’s cost-saving secret was revealed during the company’s Q3 earnings call. And that secret is automation.
More than 50% of its fulfillment center volume is now handled by automated systems—double what it was just a year ago.
Automated systems speed up processes, reduce errors, and make handling the sheer volume of online orders far more efficient.
READ: The truth about warehouse automation and employment
2. More deliveries, fewer costs
Orders per delivery have jumped 20% year-over-year, meaning drivers are handling more items in a single trip.
This not only reduces costs but also helps the environment by cutting down on unnecessary trips.
Customers also demand faster deliveries and they’re happy to pay for it. A staggering 30% of store-fulfilled deliveries in Q3 were for items delivered in three hours or less.
3. Competing with Amazon
Walmart’s faster delivery is about more than just reducing costs and keeping customers happy. It also keeps Amazon on its toes!
How? By adding another 300 delivery stores to the existing 4,200 Walmart had last year. This expansion positions Walmart as a serious e-commerce contender.
4. Delivery speed a priority
CEO Doug McMillon has made it clear: delivery speed matters.
“We want to deliver faster,” he said. “So I think we are very confident that we’re going to make money in e-commerce.”
In the past 12 months alone, Walmart delivered 4.4 billion items with same-day or next-day shipping.
Walmart is still fine-tuning its profitability in e-commerce but it’s not shy about investing in speed to win over customers.
NOW READ: Walmart vs Amazon: Who will win the war?
Walmart’s Q3 2024 performance at a glance
The retail giant’s third quarter was driven by growth in e-commerce and efficient inventory management.
- Total revenue: $169.6 billion, up 5.5% (6.2% in constant currency).
- Gross margin: Increased by 21 basis points, led by Walmart U.S.
- Operating income: Up $0.5 billion, an 8.2% increase (9.8% in constant currency), boosted by improved gross margins and higher membership income.
- Return on assets (ROA): 7.8%, with a return on investment (ROI) of 15.1%, up 100 basis points.
- Global e-commerce sales: Grew 27%, driven by store-fulfilled pickup & delivery and marketplace sales.
- Global advertising business: Up 28%, with Walmart Connect in the U.S. growing 26%.
- Adjusted earnings per share (EPS): $0.58, excluding a $0.01 net loss from equity and other investments.
- Global inventory: Decreased 1.0%, including a 0.6% drop for Walmart U.S.; in-stock levels remain healthy.
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About the author
Cheryl has contributed to various international publications, with a fervor for data and technology. She explores the intersection of emerging tech trends with logistics, focusing on how digital innovations are reshaping industries on a global scale. When she's not dissecting the latest developments in AI-driven innovation and digital solutions, Cheryl can be found gaming, kickboxing, or navigating the novel niches of consumer gadgetry.
