Walmart, the largest grocer in the US, is bringing up an aggressive expansion to its pickup services. This has transformed its parking lots into an experiment for the future of online grocery ordering, which has been a difficult retail service.
According to this pick up service, a shopper can order online the list of products they require and have to simply drive-thru the parking lot of Walmart’s 600+ neighbourhood stores all over US. There will be a designated parking spot for an incoming customer, where its personal shoppers will provide their order and load it up in the car.
Many companies have tried to notch up a market for this service including Instacart and tech giants like Amazon and Google. They have already tried to bolster sales using the door-step grocery delivery model which is similar to Peapods, which has been offering it for decades.
Even though there has been a reverting sale of books, electronics and clothes through e-commerce sites, it is estimated that less than 2% grocery shopping is done online in the US.
With the pickup model Walmart is verifying whether it holds the ace in this digital fight, it’s most reliable and difficult to replicate asset, 4,600 stores all over US. News of Amazon opening its own stores having pickup capabilities will tend to provide stiff competition. According to a survey, pickup not delivery services, have been the main motive for online grocery system for the past year.
Walmart is banking on an unconventional idea, where they are catering to the working people, who spend several hours each day in their cars. For them it is much easier to just swing by rather than waiting at home for their groceries delivered.
It will have major hindrance in building this model into a bigger business, for instance many shoppers have been reluctant to buy groceries online citing the freshness and quality of the meat and dairy products. This will be a psychological challenge of consumers faced by any company who are planning to get into this business.
Walmart has been outclassed before by Amazon, notching up 15% more sales last year. Still, if the Pickup service keeps gaining customer’s trust, Walmart is much suited to come out big, as 90% of Americans lives within 3 miles of any of its stores.
The company is particularly focusing on providing an in-depth training to its “personal shoppers”, on how to assess the freshness and quality of the produce and meat. Workers are taught to notice the signs of past peak freshness of a particular item. It also conducts produce tasting for customers so they know what they’re selecting for the consumers.
The excessive focus on fresh foods is because the customers do not count on a stranger to understand what they want, especially for fruits and vegetables. Precisely for this very reason, the idea of pickup service works very well. So if a customer sees a fruit not ripe enough, they can get an exchange on the spot.
This Walmart’s services, which has not yet reached its every store, is helping its customers to avoid hours of selecting products from the stores and then lining up in queues for billing.
On the other hand the customers are willingly subsidizing the supply process by picking up their order from the stores. This directly helps Walmart to reduce its logistics costs and increase its overall profit. For pickup, Walmart doesn’t have to revamp its supply chain as it already gets its products delivered to its stores; this gives it an edge over companies like Amazon.
The company is providing this service over its own App and the recent results suggests the pickup program to be a success.
~ Masuk Siddik