Price, assortment, experience and access is how Wal-Mart execs define what matters most to customers, and they are working to lead in each of these areas by combining physical retail expertise with ongoing innovation from Walmart.com.
“I'm excited about where retail is going and about where Wal-Mart's going to go. There are so many new ideas percolating around about what we can do with our business and today we've got more new tools to help us serve customers in a way that will surprise and delight them,” Wal-Mart CEO Doug McMillon said as he opened the retailer’s annual meeting for the investment community Oct. 15 in Rogers.
McMillon said he’s spent so much time in Silicon Valley this year that Neil Ashe, CEO of Wal-Mart Global eCommerce, has threatened to get him an apartment. McMillon said it’s the work at Walmart.com that is helping the retailer best predict customers’ needs and anticipate where their next move.
One of the most recent tools used by consumers shopping physical stores is the Savings Catcher program. Wal-Mart said 33 million receipts have been scanned and 2 million new accounts have been gleaned by Walmart.com since the app went nationwide in August. Ashe said Savings Catcher has been brand affirming and it gives shoppers a reason to come back. But it’s not just about developing tools to help shoppers save money. The work in San Bruno, Calif. – the headquarters of Walmart.com – is also about new fulfillment options and testing new delivery experiences which could be the next phase of retail shopping.
The Walmart Pickup Grocery tests in Bentonville and Denver are a collaborative effort between San Bruno and Bentonville – from the online order process via enhanced website to smart search and user friendly interface.
Michael Bender, chief operating officer of Wal-Mart Global e-Commerce, said the retailer is putting commerce where our customer wants it to be. He said the grocery home delivery and pickup are high on the retailer’s radar, not just in the U.S. but around the world.
The new Pickup Grocery format in Bentonville is a distant cousin to the “dark stores” already common in retailer’s ASDA Grocery business in the United Kingdom. Those stores have delivered groceries to online shoppers for several years.
Stewart Samuel, analyst with IGD, said it’s interesting to watch Walmart U.S. and ASDA testing pickup sites at the same time, with each coming to the concept from different perspectives.
“ASDA has planned to add lots of pickup centers in the U.K. over the next year, these will be in tube (subway) stations and fueling sites,” he said.
Bender said a similar pickup hub service is available in China for an 80,000 resident apartment complex. The shoppers order online and pick up at the apartment hub. Mexico also has a mature grocery home delivery service and pickup tests are also being evaluated there.
Sam’s Club in Bentonville is also testing a drive-thru service that allows members to shop online from club merchandise — including grocery— and select a pick up time to retrieve the order at their convenience. The Drive-thru service does not require the member to get out for their car. An attendant loads the order for the member and collects a signature at the driver’s side window.
This test at Sam’s Club is on top of the Club Pickup, which was formerly dubbed Click and Pull now available in 700 clubs in the U.S., according to Jamie Iannone, CEO of SamsClub.com.
Iannone said more seasonal holiday and weighed products have been added to the Club Pickup option. This has required members to check in at kiosk and retrieve their online orders at the front of the store. He said some changes are coming ahead of the holidays at front of-the-store pickups at Sam’s Club.
Analysts asked Wal-Mart and Sam’s Club execs last week how the retailer is balancing the productivity of workers who are now doing more of the shopping tasks for consumers. Iannone said employees picking items for consumers’ online orders are equipped with a backend navigation system that directs them to aisle and shelf locations for each product on the list. This system is also being used in the Pickup Grocery format by Wal-Mart in Bentonville and in Denver.
He said changes to the front-end collection processes and the backside of picking orders have been made possible by the ongoing work on the Sam’s Club website and mobile applications from the team in San Bruno.
Analysts also asked the retail execs how they are handling abandoned online shopping carts and if they are missing out on impulse buys when a shopper never comes into the store.
Wal-Mart said it does not ship orders until payment has been received. They give shoppers several options for paying, which includes paying in cash at the store. However, the retailer said if shoppers chose the cash payment option, the order is suspended for 24 to 48 hours to give the shopper time to go the store and make payment. Wal-Mart was very clear that it does not ship product or pull it from the shelf for fulfillment until payment has been rendered.
Ashe said many of the shoppers using site-to-store do prefer to pay for the product order in cash, but the order is not fulfilled until payment is made. In Denver, where the pickup is at the physical stores and with the Pickup at Sam’s Club, Ashe said it’s common for shoppers to enter the store and add to the physical cart 40% of the time.
Wal-Mart said online shopping for later pickup options are not a substitute for stock-up trips. Research shows that consumers appreciate retailers who will pick the products and load them because of the time savings it creates in their busy lives. That is not a replacement for browse-and-shop or treasure-hunt shopping which physical stores can provide.
Ravi Jariwala, spokesman for Walmart.com, said the new site-to-store lockers in the Pleasant Grove Road Walmart Supercenter in Rogers are an extension of the locker tests underway in the Washington D.C. stores.
He said the Rogers store is a single test site. Jariwala told The City Wire that the site-to-store delivery option for general merchandise is widely used across the retailers 4,000 stores. The process without the lockers requires the shopper to go to the Walmart.com service desk, usually located in the back of the big box store. They show a form of I.D. and give their order number and collect the merchandise, which was paid for online.
WIth the locker system, he said shoppers go to the kiosk at the locker site in the front of the store. An email or text confirmation is sent to the customer once the order is set for pickup at the store locker. The details for how to access and open the correct locker is included in the confirmation.
The lockers themselves range in size from (3” X 3”) to (18” X 18”), with six inch and nine inch versions in between. The locker resembles a large billboard display that greets customers entering the store rather than a bank of lockers as there are no handles or numbers of identifying letters. The appropriate door opens for the customer automatically once the code information is entered in the kiosk.
The team in San Bruno recently launched a Pharmacy App for mobile phones that works in conjunction with the in-store shopping app and Savings Catcher. Jariwala said within just a few weeks of launch the vast majority of Walmart’s pharmacies had received and filled a prescription via the app.
“Some 65% of our customers are mobile phone users. That percentage rises to 80% for shoppers under the age of 35. This app allows customers to refill a prescription by simply scanning a refill label on the prescription bottle or box. It also provides them a complete history review of their pharmacy account. They can also transfer a prescription with this app,” Jariwala said.
The app includes a search and locate option to find the nearest Walmart Pharmacy to the user’s physical location. It also give users an opportunity to search the retailer’s list of $4 prescriptions by drug category such as cholesterol, antibiotics and allergies.
“Right now, one-third of the total online refills that have been done digitally, were done through this application. Wal-Mart customers really love it,” said Fernando Madeira president and CEO of Walmart.com.
He said Wal-Mart’s most loyal customers are shopping via multiple formats.
“The more you shop online or on mobile, the more your (physical) store shop increases as well,” Madeira added.