Wal-Mart opens largest online fulfillment center

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ALISTAIR BARR  |  USA TODAY

Story Highlights

• New warehouse based in Bethlehem%2C Pa.%2C will be more than 1 million square feet
• Second online fulfillment center will be built in Forth Worth%2C Tex.%2C in 2014
• Strategy is aimed at improving shipping speed and expanding production selection

Wal-Mart Stores unveiled its largest ever warehouse dedicated to filling online orders Tuesday as the world's biggest retailer steps up competition with web rival Amazon.com.

The warehouse, based in Bethlehem, Pa., will be more than 1 million square feet and employ over 350 full-time staff when it opens in the first quarter of 2014. Another new online fulfillment center, based in Fort Worth, Tex., is 800,000 square feet and employs 275 full-time staff. It began shipping orders last week, Wal-Mart said.

Wal-Mart is opening new fulfillment centers so it can increase its product selection online and ship packages to customers more quickly and cheaply. Massive selection and the convenience of two-day delivery have helped Amazon become the dominant online retailer, but Wal-Mart is trying to catch up now.

"Wal-Mart is vastly expanding its number of products and improving speed of delivery to the customer," said Joel Anderson, CEO of Walmart.com.

Wal-Mart will have more than 5 million stock-keeping units, or SKUs, on sale online heading into this holiday season, more than double the number a year ago, he noted. That compares to about 125,000 SKUs in a typical Wal-Mart Supercenter.

The addition of the Bethlehem, Pa.,fulfillment center will help Wal-Mart offer more next-day delivery of online orders to customers in the Northeast of the U.S., including the New York metropolitan area, Anderson added.

In the past two years, Walmart.com has sped up delivery by 15% while reducing costs by 10% by routing online orders either to some Wal-Mart retail stores or through one of the company's more than 130 existing distribution centers.

Walmart expects sales from its e-commerce business to top $10 billion globally this year.