Wal-Mart Expands Site-to-Store Effort, Tests Lockers In D.C.

Wal-Mart Stores continues to integrate its e-commerce platform with stores to create what company officials hope is a unique shopping experience.

Walmart U.S. CEO Bill Simon said the company recently launched the locker test for site-to-store in the Washington, D.C. area.

“While this test is still in the early stages, the initial read on customer satisfaction and acceptance is very encouraging, with 90% of the customers who have used the service providing positive feedback,” Simon said during Thursday’s (Aug. 15) pre-recorded earnings call.

Washington D.C. is an interesting market for the test lockers, given that the retailer is battling the city council over a new wage law that requires big box retailers to pay a minimum of $12 an hour in wages and benefits. Wal-Mart warned the city council it would withdraw several of the six new stores planned if the law wasn’t vetoed, but the first of those stores opened earlier this week.

Mayor Vincent Gray has not yet signed or rejected the bill, but he’s expected to do one or the other within the next week.

In the meantime, Wal-Mart is optimizing its online fulfillment centers to work in conjunction with Wal-Mart’s shipping network, distribution centers and stores, according to Neil Ashe, CEO of Walmart Global e-Commerce.

Carol Spieckerman, CEO of New Market Builders in Bentonville, has said locker-sites and e-Commerce, could be the way Wal-Mart wins entry into those tougher markets like New York City and Washington. She said the final mile delivery is made easier for Wal-Mart if it can leverage its massive physical footprint to act as fulfillment centers across the country.

Two-third’s of the nation’s consumers live within 5 miles of a Wal-Mart store. Using these stores to fill online orders and putting lockers in urban areas give the retailer some really good options for tackling delivery and final mile challenges, according to Spieckerman.

Now that Wal-Mart has a new store open in D.C. the retailer has foothold in that market. Two other stores are set to open in the coming weeks, but three of the six stores have been put on hold pending the mayor’s decision to sign or veto the wage bill.

Simon said Wal-Mart views its physical presence as a significant competitive advantage for its Walmart.com business. In the past quarter, Wal-Mart has expanded its “Ship from Store” program. 

He said a steadily increasing percentage of all items shipped to customers’ homes are now fulfilled through the “Ship from Store” program. The majority of orders are delivered in two days or less and at a lower cost.

Ashe said the company is now using 35 stores as additional nodes in the online fulfillment network.

“Those stores now handle a double-digit percentage of Walmart.com orders, and the majority of those are delivered in two days or less at a significantly lower cost,” Ashe said.

The company’s “Pick Up Today” option gives customers the ability to buy a item online and pick it up in a store that same day.

“We have more than tripled the items available for ‘Pick Up Today’ since the beginning of the year. We have also developed a new capability that automatically searches our broader inventory for an item if that item isn’t available in a customer’s primary store. That has significantly improved our fill rate,” Ashe said, during the call.

He said the pilot program to deliver groceries in San Francisco and San Jose is gleaning interesting results.

“We’ve proven we can successfully use a supercenter for online grocery delivery, and we’re getting high marks from customers. Many of these are new customers. Some 75% of the customers say they would have purchased through another retailer other than Wal-Mart. And, 83% would recommend Wal-Mart grocery delivery,” Ashe said.