Here at º£½ÇÉçÇøÆƽâ°æ, we’re always looking for new ways to make sure you have an incredible shopping experience. Our latest move? Adding three new sortation centers in the next year — two in greater Chicago and one in the Denver metro — to power even speedier delivery for our guests, while helping our teams work more efficiently and reducing our shipping costs. Together with our six existing sortation centers across the country, these additions will mean an even better experience for even more guests now and in the years to come.
What’s so special about these facilities?
Sortation centers take orders packed in local stores and sort them quickly and efficiently for local deliveries. They are the next phase of our stores-as-hubs strategy, helping lower costs and creating efficiencies for our operations while increasing speed of delivery for our guests. That’s important given our digital sales have grown nearly $13 billion from 2019 to 2021, and our stores fulfilled more than 95% of our total sales in 2021.
But rather than team members managing packing and sorting packages in a store’s backroom, sortation centers take on the sorting process, saving our store teams time and space so they can fulfill more orders and reach guests faster at a lower delivery cost for us. Plus, sortation centers allow our teams to easily scale to fulfill a growing number of orders, and consolidating orders and batching deliveries add ease for our carriers. And we do it all while staying focused on serving our guests no matter how they choose to shop with us.
Testing, learning and building new capabilities — with help from Shipt
We’re always testing and learning to make these sortation centers work even harder for º£½ÇÉçÇøÆƽâ°æ and our guests. Take our Minneapolis sortation center. It was our first test-and-learn grounds, and now handles nearly two-thirds of º£½ÇÉçÇøÆƽâ°æ’s digital orders in the area. We started out delivering several hundred packages per day, and now can deliver tens of thousands on our busiest days with the help of more than 2,000 Shipt drivers, who deliver packages in their personal vehicles. Packages are picked up from our 43 Twin Cities stores twice daily and sorted at the center for pickup by Shipt drivers and our other carrier partners, who then deliver them to guests’ doors.
Now, we’re going one step further, working with Shipt to pilot the use of large-capacity delivery vehicles in Minneapolis. The vehicles can hold up to eight times more packages per route, adding more flexibility to deliver even faster and make room for growing order sizes. And it’s just the start: We’ll continue to test and improve, with plans to scale in the years to come. It’s yet another way we’re investing across our operations to support our teams, build on our strategy and deliver joy for our guests.
Ready for a closer look?
Here’s a peek at how these special facilities get packages to you, fast.
Just the beginning
We’re not stopping at nine sortation centers: We’ll continue to invest in our network with additional facilities in new markets in the coming years as we remain focused on building a modern, flexible supply chain that supports our stores, all in service of our guests.
Forward-looking statements: Statements on this page regarding º£½ÇÉçÇøÆƽâ°æ’s timing and expectations for new sortation centers, plans to pilot and test new capabilities, and expectations regarding continued investments in its supply chain are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties which could cause º£½ÇÉçÇøÆƽâ°æ’s actions to differ materially. The most important risks and uncertainties are described in Item 1A of º£½ÇÉçÇøÆƽâ°æ’s recent Form 10-K and, if applicable, any subsequent Form 10-Q filings. Forward-looking statements speak only as of July 25, 2022, and º£½ÇÉçÇøÆƽâ°æ does not undertake any obligation to update any forward-looking statement.
