Dive Brief:

• Walmart will double the number of stores that offer online grocery pickup, according to Retail Leader. The announcement was one of many made by the retailer during its annual investors conference in Bentonville, Arkansas.
• The company, which is slowing its store growth and will open fewer than 15 supercenters next year and expects its e-commerce sales to grow 40% during that period.
• “We’re combining the accessibility of our stores with e-commerce to provide new and exciting ways for customers to shop," Walmart CEO Doug McMillon told conference attendees.

Dive Insight:

Grocers across the U.S. have ramped up their online shopping capabilities, but none of them have the scale and resources to match Walmart’s store pickup program. Currently, the mega retailer offers pickup at 1,000 stores, and will increase that number to 2,000 out of its 4,600 stores by the end of next year.

Not only has Walmart been the all-important first to market in regions across the country, but it offers numerous other advantages as well. Store pickup is free, whereas many other services charge a fee, including Kroger’s ClickList, which is $5 after the first three orders. It’s also convenient, with around two thirds of American households living within five miles of a Walmart store.

Marc Lore, Walmart’s head of e-commerce, said the company’s online shopping efforts are not yet profitable, but that results are improving year over year as customer adoption increases. Online grocery sales in the U.S. are forecast to grow an average of 18.1% annually during the next five years, according to IGD. Nationwide, 49% of Americans tried click-and-collect for the first time last year, and the number of repeat customers is growing.

Along with its store pickup service, Walmart is also testing a few home delivery options, including store employee delivery, Uber delivery and a direct-to-fridge option that made headlines earlier this month. The company also offers pickup towers, automated returns, free two-day delivery and a host of other projects aimed squarely at the future.

Walmart’s store growth, meanwhile, has slowed in recent years, and will nearly come to a halt in fiscal 2018 as the retailer focuses primarily on store remodels. CEO Doug McMillon told investors and analysts that its supercenters are “largely built out,” so Walmart will only build around 15 in the coming term.

Walmart, whose shares surged on the e-commerce growth projections and on news of a $20 billion stock buyback, is driven to get ahead of consumer demand and compete with Amazon. Although Walmart will likely never beat Amazon on online retail sales, the two stand to drive online grocery innovation over the coming years.