Dive Brief:
- Walmart officials said during this week’s earnings call that the company’s grocery pickup service is showing “strong results” in the more than 900 locations where it’s operating, according to USA Today. By the end of the year, Walmart hopes to have its pickup service available at 1,100 stores.
- Walmart’s online grocery sales helped boost e-commerce sales 60% in the second quarter, and contributed to the retailer's best comps in its grocery division in five years.
- Walmart also offers employee delivery, pickup towers and a few other experimental e-commerce initiatives. Analysts say the retailer needs to continue ramping up these services to remain competitive.
Dive Insight:
In e-commerce click and collect, profitability often hinges on being the first to market with the service. Walmart has accomplished this in locations across the country with the aggressive rollout of its store pickup program, which it plans to eventually offer in all of its 4,600 stores.
This is just one of a few online grocery services the retailer is ramping up. Earlier this year, Walmart announced it was piloting an employee delivery program that paid associates for shuttling as many as ten order to customers’ homes. Walmart has also been testing automated kiosks where shoppers can grab their online orders.
Along with its popular two-day shipping program and the scale-up of its Jet.com site, these efforts helped boost Walmart’s 60% increase in its ecommerce business during the latest financial quarter. They also contributed to the company’s biggest gain in grocery comps in five years.
“We’ve seen strong results from the rollout of online grocery, which is now in more than 900 U.S. locations, and we’re expanding this service in many of our markets around the world,” Douglas McMillon, Walmart’s CEO, said during the company’s earnings report this week. “Retail is constantly evolving and it’s critical that we move even faster as the customer and competitive landscape continue to change.”
Walmart officials said they plan to continue to expand the product assortment available for grocery pickup. The company also is driving growth of the program with digital offers and other enticements, such as $10 off the first order over $50, easy reordering and a tool that allows customers to see product inventory levels.
Interestingly, Marc Lore, Walmart’s e-commerce chief, recently noted grocery pickup customers are often coming into stores to do more shopping. Combined with its coupons and other innovations, the retailer seems to be driving growth through new customers as well as bigger baskets.
Officials noted they’re closely watching discount competitors Lidl and Aldi along with Amazon, whose main threat right now seems to be the sense of possibility it holds. Amazon could become a major disruptor with its Whole Foods acquisitions, but it will still trail Walmart in terms of store footprint and may also struggle to overcome the retailer’s expanding home delivery service. For now, Walmart appears to be the winner in the online grocery wars.
