ATLANTA—Around midyear, Walmart will open a massive 1.2 million-square-foot e-commerce fulfillment center just west of Georgia’s capital. Robert Zelis, vice president supply chain, Sam’s Club.com at Walmart eCommerce, says the new facility, which will house 500,000 SKUs, is just one indication that Walmart is adapting well to the changing habits of shoppers.
Zelis was the keynote speaker on Thursday as NAIOP’s E.CON kicked off its two-day run of speakers highlighting trends in e-commerce-related real estate. Zelis joined Walmart eight months ago after serving as senior director, supply chain for Office Depot. He says the retail sector is well into a paradigm shift as more consumers turn to online shopping.
“We are working very hard at Walmart to shift with consumer spending,” Zelis says. “E-commerce is at a 15 to 20 percent growth rate overall. Our rate is somewhere north of 25 percent.”
Helping fuel the increase is the rapid growth of urban areas where customer don’t care to drive to do their shopping.
“As smart phones become easier to use, more people are comfortable using them to shop,” he says. “Customers are also changing the way in which they wish to receive products. They want fast and free shipping and 43 percent say they want it the same or next day. That’s a big challenge for us. They also want to choose the date and time they receive products and they want it all in one box. That’s a big challenge for retailers.”
Walmart has 2.2 million employees globally and 90,000 work in its supply chain. Zelis says the company has a culture of embracing change and that is helping the giant retailer as it adjust to e-commerce. He says Walmart is looking at the development of aggregation centers to expedite e-commerce service to urban areas.
Walmart.com opened its world headquarters in San Bruno in the Silicon Valley a few years ago. Zelis says the company is attracting some of the brightest minds in e-commerce.
“We will win by being Walmart,” Zelis says. “Constant change is a vital part of Wal-Mart’s culture.”
Following Zelis’ remarks, NAIOP named Trammel Crow Company as the winner of its inaugural E-Commerce Project of the Year for its I-215 Logistics Center that it developed for Amazon in Moreno Valley. Thomas A. Bak, senior managing director, Southern California Development & Investment for Trammel Crow, accepted the award, saying the project is a prime example of an e-commerce company taking on a spec building and making it work.
“It shows it doesn’t have to be built-to-suit,” Bak says.
A committee of industrial real estate and e-commerce experts made the selection, says Steve Martin, NAIOP’s chairman. Factors considered included financial criteria, economic impact, innovation and design and ability to overcome challenges.
Trammel Crow partnered with Clarion Partners in development of the 1,254,000-square-foot facility on a 75-acre parcel in California’s Inland Empire. Bak says the project was launched in 2011 when even in the Inland Empire, there was a downturn and things were soft.
“We were doing a high-wire act when we decided to build it,” Bak says. “There was no pre-leasing or direct tenant contact.”
The building was 80 percent complete when Amazon decided it liked the location. It became Amazon’s fourth fulfillment center in the region.
“At that point we stopped the project on a spec basis and worked with Amazon to modify it for their use,” Bak says.
The building was designed with 32-foot clear height and 60 x 52-foot column spacing and a 7-inch floor slab. The roof design included two additional pounds of design load per square foot for enhancements to the roof-framing plan, allowing for either the future installation of a rooftop photovoltaic system or for potential tenant requirements.
Other key design innovations include:
• Master planned site with multiple points of entry for trucks and employee automobiles.
• Truck queuing for superior truck maneuvering and staging.
• A significantly upgraded security system.
Bak says Moreno Valley is an economically depressed city and the project is having a major impact with jobs and taxes. The center employs 1,000 full-time employees and ramps up to 2,500 during peak season.