Field Agent survey says Walmart grocery pickup idea popular with users

by The City Wire staff ([email protected]) 656 views 

The good news is that 74% of those participating in a recent survey like the grocery pickup models being tested by Walmart, however, just barely one in 10 of customers in the test markets have used the grocery pickup service.

It was a bold move for the nation’s largest grocer Wal-Mart Stores, the nation’s largest grocer, to gamble big on the online grocery business using a pickup model that requires shoppers to drive to a location to retrieve their orders. Amazon, the chief online competitor, began delivering groceries to its customers in many major U.S. cities.

Shoppers using Wal-Mart’s grocery pickup option say they like the service, and 74% of the Walmart Grocery Pickup shoppers in a recent case study conducted by Fayetteville-based Field Agent said they’d rather purchase the same grocery order from Walmart Pickup as opposed to a store.

Field Agent also asked its survey participants about the likelihood they would use Walmart Pickup again in the future. Those results were also favorable with 77% of the first time participants indicating they would at least moderately likely to use the service again. Among repeat customers, 69% said they will continue to use the pickup services for their grocery needs.

While customers who use the pickup service tend to like it, they are still a small fraction of the overall population. Forrester Research indicated in 2013 that online grocery shopping accounted for just $15 billion of the overall $1 trillion market. Forrester also projected that online grocery shopping would reach $21 billion by the end of 2016. Nice growth, but still only a drop in the bucket, according to the Field Agent report.

Field Agent also sought info on online grocery shopping trends, particularly in areas with access to grocery delivery and grocery pickup services. They surveyed 500 shoppers in urban areas designed as pilot cities or test markets for grocery pickup services — San Jose, Phoenix, Denver and Huntsville, Ala. Field Agent did not survey shoppers in the Bentonville market, where Wal-Mart has offered grocery pickup for the past year. 

Only 20% of the shoppers in the test markets said they had used grocery delivery and just 12% had used pickup options for their past grocery purchases. Field Agent sought to project where online grocery is headed in the future by asking the 500 participants who likely they would be to use pickup services going forward.

“In all, 70% indicated they are at least moderately likely to use grocery pickup in the future — a fairly healthy number for this stage in the game,” the report stated.

Shopper reservations about using grocery pickup services stem from their inability to see, touch, and smell groceries ordered online. In fact, 67% of the respondents voiced this concern saying it would make them less likely to use a pickup service in the future.

“Although it sounds like a good concept the inability to touch and see the final
product is the main reason I would not use online grocery pickup/delivery. My idea of what I want in a banana for example is not going to be the same when someone else picks it out,” said a 48-year-old male shopper from Mesa, Ariz.

Only about one-third of the respondents said they are comfortable buying bananas, tomatoes or steaks online. That said, there are many other grocery categories that shoppers feel comfortable ordering online. Following is a list of some of such items.
74%, alcoholic beverages 
71%, canned goods
69%, toothpaste
68%, breakfast cereral
67%, feminine hygiene 
63%, chips and salty snacks
55%, over-the-counter medicines
50%, bread
48%, milk

Another reservation voiced by shoppers is their hesitation about leaving coupons, discounts, price matching guarantees and sales promotions behind. Field Agent found that 65% of shoppers in its 500-person survey said the inability to take advantage of sales promotions such as coupons, in-store discounts could deter them from using grocery pickup in the future. Likewise, a whopping 91% said being able to use coupons, or being able to benefit from other in-store discounts, was either “extremely” or “very” important to them.

“Shopping online is a huge time saver for a busy working person. However, price and the ability to shop sales and take advantage of promotions would be critical to me using the service,” notes a 57-year-old female shopper in Littleton, Colo.

Those surveyed by Field Agent also said for them to use grocery pick services the locations would need to be no more than 10 miles away. 

This is one reason why Wal-Mart recently announced the expansion of its pickup grocery services around Northwest Arkansas. Beginning Sept. 23, shoppers from Fayetteville to Bella Vista may order their grocery items online and pick up the purchase in one of six area locations. Customers may begin picking up groceries at five Neighborhood Markets and the Walmart Pickup – Grocery location that opened last year at 3701 SE Dodson Road in Bentonville, according to the Wal-Mart Stores press release.

The approved store pickup locations are:
• Fayetteville, 2690 East Citizens Drive
• Springdale, 4900 Jennifer Terrace
• Rogers, 808 West Walnut (opens Sept. 23rd)
• Bentonville,1703 East Central Avenue
• Bentonville,1400 North Walton Boulevard

Shoppers surveyed by Field Agent also showed some time sensitivity regarding pickup and delivery services. In all, 84% of respondents in the 500-person survey said same
day delivery would be “extremely” or “very” important in considering whether to purchase groceries online. 

More than half said it’s very important for e-grocers to operate 24-hours a day. Wal-Mart’s pickup grocery only operates between the hours of 8 a.m. to 8 p.m. in its Northwest Arkansas locations. There are no plans to expand those hours and the retailer does not offer grocery delivery in the local market because they say the demand would not justify the cost.

Overall, shoppers who took part in the Field Agent Case Study using Wal-Mart’s grocery pickup service gave it a rating of 3.74 out of 5 (highly satisfying). Users were mostly satisfied with the service. They gave Wal-Mart a rating 4.05 for its website navigability and 3.87 for locating specific items on the website, which carries about 30,000 items.

With 5 being “very easy” and 1 being “very difficult” shoppers rated Wal-Mart’s kiosk system at the pickup site at 4.41 for ease of use. First timers gave its 4.17 rating.
From the moment they submitted an order to the moment they received it, Walmart Pickup shoppers waited an average of 5 minutes to receive their groceries.
62% said this was shorter than they expected, and only 13% said it was longer. There was no marked difference between all users and first-time users, according to the report.
The vast majority of shoppers (95%) said their order was correct the first time. Meaning only 2 of 39 received something different than what they ordered.

Analysts have applauded Wal-Mart for its efforts to invest in grocery pickup saying those out front are likely are likely to reap the largest gains.

“Overall Walmart should be encouraged by the study as a large majority of pickup users said they’d likely use the service again. The study confirms that pickup may be used more for fill-in orders vs. the large weekly trip. That could be good news for Walmart as they attempt to recapture fill-in order business lost to Dollar Stores and other more convenient options,” said Jason Long, CEO of Shift Marketing Group in St Louis.

He said going forward the question for Wal-Mart is one of strategy. 

“Groceries drive footsteps into stores so a balanced strategy focusing pickup on fill-in orders could make the most sense for now. But longer term as grocery pickup and delivery gain more traction, the compromises of not being able to use coupons or touch the fresh food will need to be addressed,” Long said.   
Paula Rosenblum, managing partner with RSR Research, said there is a market for consumers who will buy online and pickup in store just as there are those want their orders delivered. What is lacking, according to Rosenblum, is the profit model for these services. It remains to be seen if Wal-Mart can figure out to make money at it given groceries are a low-margin business.

Adrian Weidmann executive with StoreStream Metrics, believes that this new shopping format will eventually emerge as the “new” retail. He said the obstacle is familiarity and trust. Once shoppers understand how the process works and realize the ease and convenience their behavior will change. Weidmann said buying online and picking up in-store will likely become the new normal in retailing in a host of verticals from fast food restaurants to do-it-yourself retailers.

“Once digitally empowered shoppers become familiar with and trust the process, it is up to the retailer to make certain the experience is seamless and customers actually get what they ordered and paid for,” Weidmann said. 

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