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Battle of the distribution centers

Wal-Mart is building online distribution centers and preparing to take on Amazon.com

Toward the end of January, the Wall Street Journal reported that Wal-Mart has given itself two years to match the online service and delivery speed of Amazon.com.

In an interview at the World Economic forum in Davos, Switzerland, Neil Ashe, Wal-Mart’s global e-commerce CEO told Journal reporter Dennis Berman was building new warehouses across the country dedicated to handling online orders.

One facility opened recently in Fort Worth, Texas, and another will soon go up in eastern Pennsylvania’s Lehigh Valley. More will follow, said Ashe.

The new distribution centers will expand Wal-Mart’s current fulfillment capability being handled now by store inventory and distribution centers providing inventory for stores and fulfilling online orders.

Perhaps the most interesting part of the Journal article is the tone with which Ashe spoke. He said: “This is not a side project. This is how we will be serving customers going forward. With the wave of capacity we are building, we will not be at a disadvantage.”

That’s how business giants trash-talk each other.

This is going to be fun to watch. All retailers, big and small, have been trying for years to figure out how to compete with Amazon and Wal-Mart. Now it looks like Wal-Mart is going to challenge Amazon online. How will Amazon respond?


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