Walmart tests drive-through grocery concept

Discussion
Oct 01, 2014

Earlier this week, Walmart debuted its Walmart Pickup – Grocery service to registered customers in its hometown of Bentonville, AR. Plans to build and test the concept were announced earlier this year by former Walmart U.S. CEO Bill Simon.

The test concept, which is a free service, involves customers placing their orders online any time from two hours to three weeks in advance. Customers drive to the Walmart Pickup – Grocery warehouse and use a kiosk to notify attendants that they are ready to pick up their orders. Walmart associates bring orders out to customers’ cars. In total, shoppers have about 10,000 items to choose from, including dairy, meat and produce as well as HBC and household items.

A video posted on YouTube by a Walmart customer who used the service along with his three children described it as the "least painful shopping trip ever!"

[Image: Walmart Grocery Pickup]

"Shopping eats up time and can be a major inconvenience for parents with small children and the elderly and infirm," Carol Spieckerman, CEO of newmarketbuilders, told The City Wire. "This is also a great way for Walmart to make the most of its digital platform, to acclimate more customers to using it and to gather more information on its customers’ searching and shopping habits as they place orders online."

Walmart Pickup – Grocery follows the test of another drive-through format, Zoomin Market, which opened to an enthusiastic response in Olathe, KS earlier this year. Zoomin, which bills itself as "the next big idea in grocery," is located in an area of 125,000 people. Population density is said to be key to the success of drive-through grocery concepts.

Is it the right time for concepts like Walmart Pickup – Grocery and Zoomin Market? Where do you see Walmart Pickup – Grocery fitting in with Walmart’s overall strategy for growing its business?

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15 Comments on "Walmart tests drive-through grocery concept"


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Dr. Stephen Needel
Guest
7 years 9 months ago

You’re giving shoppers another way to shop at your store. As long as that way is profitable, what a great idea. No mention of whether the service is free or whether there is a service charge—that may make a difference. And it would be interesting to know if there needs to be new construction with a different type of facility (adding to the expense) or if this will work out of regular Walmart stores.

Ryan Mathews
Guest
7 years 9 months ago

It’s hardly a new concept. Here in the Detroit area we have even had drive-through liquor stores for years, although that concept never did make all that much sense to me.

So, given the right demographics and the right operator, drive-through does make some sense. But, it’s probably not going to be the tsunami wave of retailing’s future, more like a wave in the general direction of its past.

In terms of its strategic implications—again given the right demographic—it could be a “nice to have” for some operators, complimenting existing services, but it doesn’t seem like one of those “need to have” innovations.

Keith Anderson
Guest
7 years 9 months ago
Click-and-collect, which accounts for more than 80 percent of the online grocery market in France and is growing rapidly in the U.K., appeals to brick-and-mortar retailers for a few key reasons: It often leverages existing real estate, DCs, stores, and inventories. It eliminates (or minimizes) the cost and complexity of managing a delivery fleet. It helps the retailer retain shoppers that otherwise might be tempted to switch to a competitor that offers online grocery options. It can increase share of wallet. Given the accelerating availability of online grocery options, it’s no wonder that Walmart, Kroger, Peapod and other U.S. grocers are exploring or expanding pick-up now. It’s a compromise between offering the shopper greater convenience and balancing the notoriously difficult economics and logistics of online grocery. That said, American households are being conditioned to expect fast and near-free delivery by Amazon and venture-backed tech players, especially in high-density urban metros. Delivery fees and timing matter a lot, but on balance I think many households would prefer delivery if given the choice. I expect both delivery… Read more »
Chris Petersen, PhD
Guest
7 years 9 months ago

BOPIS (Buy Online Pickup In-Store) sounds great until you get to the store, can’t fine parking, and then still have to schlep everything out to your car.

The Walmart Pickup concept has been implemented by many retailers for large items like appliances. If Walmart can take the pain out of grocery shopping AND the pickup at the store, it may have a winning platform.

Even as large as Walmart is, store traffic has been flat or declining. This at least gets consumers visiting Walmart both online and at the store. More importantly it fits Walmart’s overall BOPIS strategy of using it’s 4,800 U.S. stores as distribution points to compete with Amazon as it increasingly grows its food and consumables business.

Richard J. George, Ph.D.
Guest
7 years 9 months ago

Absolutely. Walmart’s biggest competitive threat is Amazon. As noted in my post yesterday, online food shopping will continue to grow and Walmart needs to be a major player in this venue. Keep in mind that Amazon has tested over 20 online purchase delivery options.

This fits into Walmart’s strategy of offering more convenience to its customers. In addition to delivery options it is focusing on smaller formats, e.g., Neighborhood Market and Walmart Express.

Gene Detroyer
Guest
7 years 9 months ago

I doubt if anyone could say it better than Carol. “‘Shopping eats up time and can be a major inconvenience for parents with small children and the elderly and infirm,’ Carol Spieckerman, CEO of newmarketbuilders, told The City Wire. ‘This is also a great way for Walmart to make the most of its digital platform, to acclimate more customers to using it and to gather more information on its customers’ searching and shopping habits as they place orders online.'”

I am none of the above, but I would buy into this service in a minute. The only service better is home delivery.

Steve Montgomery
Guest
7 years 9 months ago

Meeting consumers’ needs is always a good element in a business formula. Convenience is one of the needs with today’s time-starved customers. Walmart Pickup allows for a large number of alternatives—the same person who places the order can do the pickup, one person can place the order and another pick up the groceries, etc.

What makes it doubly attractive is that it is free. Not sure of the person that bring out the groceries can receive a tip or not but it would be a small price to pay. Like any of these services a lot of the success will depend on its ability to meet customers’ expectations with perishables. A can of Green Giant beans will always meet consumers’ expectations but a sirloin steak is another matter.

David Livingston
Guest
7 years 9 months ago

This story gets recycled every few years but this time it is Walmart. So now I will take it more seriously, because this is the first one with any ability to compete on price. I doubt that it will catch on too much. Going grocery shopping is still fun and I would rather visit a Wegmans, Whole Foods, Trader Joe’s, Woodman’s, etc., than sit through a Walmart drive-through. Plus you have to go online to shop first, which takes up time, so I don’t see much of a time savings.

Lee Esmond
Guest
Lee Esmond
7 years 9 months ago

Walmart Pickup is the bridge between brick-and-mortar and dot-com. It is the next level of omni-channel engagement that is right for all shopper segments. Having been a loyal Web Van customer in the ’90s (yes, I was the ONE), if a retailer can make my shopping more efficient in any way, that makes them a mandatory in my life. This is why Amazon and their free shipping has become my go-to for last-minute gifts and items that I hate to physically spend money on. They have removed the pain. Now Walmart has come in with a way for me to expedite my shopping experience with minimal effort, allowing me to order online without distraction. In essence Walmart recognizes the value of my time with the introduction of such a service.

Camille P. Schuster, Ph.D.
Guest
7 years 9 months ago

Some research indicates that a good number of consumers prefer picking up their own orders, even when they order online. This new format provides an opportunity for consumers to do that. Using a warehouse for pickup will not be feasible everywhere because in some cases consumers would have to drive a long distance to reach the warehouse. Experimenting with many alternatives to determine which formats work best in which markets for which consumers is a great idea.

Ed Rosenbaum
Guest
7 years 9 months ago

It seems like we have been here before and tried this unsuccessfully in the past. What can we get from this that would lead us to think it will be successful this time around? Certainly there will be a number of shoppers who will prefer this. But for the average shopper and homemaker this will not work. Especially when it comes from meats and perishables. We want to select our own, not have a clerk do it for us. I can visualize the shoppers at the return counters now.

Kenneth Leung
Guest
7 years 9 months ago

It is another way of Buy Online Pickup In Store, with a better way to handle the parking situation. Walmart is now adjusting its store formats to cater to diverse consumer need. It is just one of the diverse things Walmart needs to do other than the traditional big box format. The issue is getting the economies of scale with the technological investments.

Kim Souza
Guest
Kim Souza
7 years 9 months ago
Walmart is using this format as a testing ground to access consumer attitudes toward pickup grocery in this country. It’s caught fire in France and other countries. It’s about using technology and the retailer’s physical size to innovate new shopping opportunities that provide convenience. I tested the service on opening day and reported that experience. Walmart is also able to save the shopping lists for the user if they want, and then generate a quicker shopping trip the next time. At some point the retailer might be able to alert you when you are shopping that you could need a certain a item based on previous shopper behavior. For me personally, the experience was OK. It took me a little while to order the products online—using the search bar was the fastest way, but I encountered several items on my list that were not available in the new format. Either the size or flavor choices were not there. I also encountered that produce ordered, two Gala apples, did not meet my expectations. One of them… Read more »
Larry Negrich
Guest
7 years 9 months ago

It’s always the right time for a creative retailer to create an appealing shopping option for a select segment of consumer. However, it’s difficult to see how a widespread offering of click ‘n collect could be profitable in grocery.

No matter how this concept may be crafted utilizing technology and process efficiencies, there is still an additional cost component (labor, technology, space) that would be added to each item, either reducing the profit or increasing the consumer’s cost. With margins thin in grocery to begin with, any long-term offering will mean increasing the cost to the customer and thereby losing some of the potential market.

The option of click ‘n collect may be worth it to certain customers in certain circumstances and give a retailer a service advantage in the market. However, there is an additional revenue drain for the retailer as impulse purchases will be reduced, meaning basket size will be reduced.

This concept requires a number of factors to align — consumer traffic, merchandise offerings, space, customer affluence — in order to be profitable.

Herb Sorensen, Ph.D.
Guest
7 years 9 months ago

This is another advance in BOPIS, buy-online-pickup-in-store. The management of the retail process inside the store is still nightmarish, but these initiatives are helping to Converge-Online-Mobile-and-Bricks retailing — COMB, the future of successful retailing.

I heartily approve! 😉

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