Following in the steps of e-commerce giant Amazon, Wal-Mart officials on Tuesday (March 26) announced plans to begin testing the use of self-service storage lockers in a limited number of the stores this summer.
Neil Ashe, CEO of Wal-Mart’s e-commerce unit, made the announcement to a group of reporters at an e-commerce media day in San Bruno, Calif., on Tuesday. Wal-Mart spokeswoman Ashley Hardie confirmed the lockers will be available in roughly a dozen stores by early summer.
“We are still finalizing the details, but customers will be able to order online and have products shipped to a storage locker at a local store for free. They will receive a passcode and can pick up the items at their leisure. Locker sizes will vary from store to store,” Hardie said.
With more than 4,000 U.S. locations, Wal-Mart has a clear advantage for rapid order fulfillment if details are worked out and the entire store network is involved in the locker model. Many of those stores are also open 24 hours a day, which provides more convenience for shoppers.
Analysts agree the potential saturation is huge as two-thirds of the U.S. population live within five miles of a Wal-Mart. But the question remains as to how much it would be utilized.
Chief online rival Amazon has utilized storage lockers within Staples, Rite Aid, RadioShack, 7 Eleven stores and other regional drug and grocers since last year. Amazon has not rolled out the locker program in Arkansas, but has chosen to do so in more populated regions such as New York and California.
Wal-Mart does not break out its online sales, but Ashe revealed to Reuters Tuesday that the retailer is poised to surpass $9 billion in online sales this year. This pales in comparison to Amazon’s reported $61 billion, but Wal-Mart continues to dominate the overall retail market with $466 billion in annual sales last year.
According to Reuters, Ashe told the media, "We can build e-commerce equivalent to anyone in the world.” Mixing the company's expanding online capabilities with its knowledge from running stores for 50 years "creates a commerce experience that no one else can do."
Hardie said Wal-Mart has tested the shipping of online orders from a small number of its physical stores and distribution centers for about two years. She said this program offers faster delivery to store and to homes for reduced costs.
Wal-Mart will expand this program to include about 50 stores this year.
Analysts continue to say delivery is key to winning favor with online customers.
Wal-Mart says using stores as delivery centers that are closer to customers help the retailer to provide same-day and next-day delivery are a low cost.
Matt Kistler, senior vice president of dry grocery for Wal-Mart US, told a room full of suppliers on Tuesday in Rogers that 80% of Walmart.com customers frequent a Walmart store at least once a month. He said 35% of Walmart.com visitors access the site from smartphones. And Walmart.com reached 3.7 million consumers who searched online for information on groceries in the last month.
Product assortment on Walmart.com includes more than two million items and the company said it plans to double that this year,