Walmart officially began delivering groceries to the inside of customers’ homes and refrigerators this week in Kansas City, Pittsburgh and Vero Beach, Fla., with the potential to serve more than one million customers.
While the potential is there, it’s too early to tell how well the service will be received. There are costs associated with it. Users must purchase a $49.95 smart locking device that allows delivery people access to the home. Walmart said the installation is free and the company is working with Level Home for the front door smart entry technology. Customers also have the choice for garage entry and Walmart is working with Nortek Security & Control for that option.
Walmart said in-home delivery is being offered as a membership for an introductory price of $19.95 per month with delivery order minimums of $30. Walmart said the first month is free, but the retail giant is confident consumers who use it will like it and will want to keep the service. Walmart said the service can be paused or canceled at any time.
“With InHome Delivery, we’re putting more well-deserved time in the hands of our customers,” noted Bart Stein, senior vice president, membership and InHome, in a blog post on Walmart’s corporate site.
“Take Laura, a mom of three in Kansas City with a full-time job as a graphic designer. Laura loves baking banana bread with her kids but doesn’t have enough time to shop for the ingredients after work and get it out of the oven before bedtime. Now, with InHome Delivery, Laura can order all the ingredients she needs and have them delivered directly into her fridge while she’s at work — no more late-night trips to the store or taking time out of Sunday afternoons with her family.”
Stein said Walmart is obsessed with simplifying grocery shopping and finding ways to make customers’ lives easier. That’s why InHome goes the extra step so that customers can stop worrying about making it to the store or being home to accept delivery.
Once the customer is set up for in-home delivery, Walmart said trained employees will use the smart entry technology and proprietary wearable camera to access the customer’s home. Customers can watch the entry and track the in-home delivery via a smartphone, tablet or computer remotely.
Walmart said it will evaluate the three test markets and continue building on its service offerings while expanding to more customers in the months to come. Walmart said the concept was launched from its Store No. 8 incubator and now the in-home service is graduating. Walmart said it will now scale its capability as an integrated part of the Walmart U.S. team.
A poll conducted by RetailWire asked retail and supply chain experts to weigh in on the move by Walmart. When asked if in-home delivery would be a success for Walmart, just 27% of respondents answered “very likely” or “somewhat likely.” The majority of respondents (73%) said in-home delivery was “very unlikely” to be a success for Walmart.
Mel Kleiman, president of Humetrics, said it doesn’t matter if the offering is successful or not because it represents a real chance to learn more about what customers really want in the way of time savings and convenience, and what they are willing to pay for. He said Walmart no doubt is doing thorough screening for those who will be doing the deliveries.
“I would bet the screening is much better than that being done by most house cleaning services,” he said.
There were some naysayers like John Karolefski of CPG Matters who said, “Just another signpost on the road of crazy ideas. Three words: theft, breakage, Doberman.”
He won the praise of Georganna Bender, a customer anthropologist at Kizer & Bender, who simply said: “John, you nailed it!”
Bender said she would not allow a Walmart employee into her home when she was not there, but she understands how retailers are trying to discover the next big thing.
“Some people will be just fine with strangers walking around their homes, but I can’t imagine that this service will be big,” she added.
Other experts said Walmart can learn from the experiment, but the real question will be if the service is profitable enough to be sustainable. The overall consensus at this juncture involves concerns about privacy and creepiness.
Mark Ryski, CEO of HeadCount Corporation said these concerns of privacy will likely stunt adoption.
Steve Breen, general group manager at Walmart.com, said recently when speaking in Bentonville the service is geared to those Millennials and first adopters who helped to make Uber and Airbnb household names.
“Remember when we could never have imagined paying strangers to take us in their cars to places we needed to go or renting out rooms in our homes for people who needed a place to stay for a night or two? Today, that is commonplace and it built the giant businesses of Uber and Lyft, Airbnb and VRBO,” Breen said.
“We don’t know until we try who all may be comfortable with in-home delivery,” Breen added.