Online grocery shopping presents clear challenges to retailers. One of the biggest is that keeping grocery items cold during shipping isn’t easy. Walmart decided to combine a store pickup program with online grocery ordering to combat the need for refrigerated delivery trucks. Take a look at how Walmart has made its online grocery shopping and store pickup program a success and how Amazon will have to work hard to compete.
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Situation: Customers Want to Order Groceries Online
Online grocery shopping is appealing to customers because of the convenience factor. Shoppers no longer need to spend an hour or more browsing for groceries, and they’re willing to pay a little extra for this service. There are some drawbacks for customers, though. For instance, customers lose the ability to hand-select produce, and order accuracy isn’t perfect. Overall, however, studies show that consumers are willing to switch to online grocery shopping because of the convenience.
From a retailer standpoint, online grocery shopping costs more money to fulfill because it requires additional manpower. That’s why most online grocery shopping programs charge a service fee and delivery charge. It also costs more money to keep orders refrigerated. Walmart wanted to find a way to offer online grocery shopping without all of the extra costs to the customer. That’s where the store pickup part of its program comes into play.
Approach: Walmart Implements Online Grocery Shopping With Store Pickup
Image via Walmart.com
In September 2015, Walmart announced it would begin testing online grocery shopping with store pickup at several locations across the United States. If the program proved successful, Walmart would roll it out to more and more stores based on need. Almost one year later, customers are satisfied with the service, and it’s expanding rapidly.
It’s easy to use Walmart’s online grocery shopping and store pickup service. You simply create an order online, schedule a pickup time, and then go pick up your order from your local Walmart store. You are required to spend a minimum of $30, but that’s easy to do when you’re buying groceries.
Impact and Advantage
Competitor Amazon is working on a fresh food delivery program to accompany its Prime Pantry program, which allows shoppers to order anything available at a grocery store. In contrast, Walmart’s approach focuses on store pickup instead of home delivery. This adds a little bit of work for the customer, but it costs less than delivery and refrigeration. It’s a win for both Walmart and its customers because Walmart saves money and transfers this savings to customers.
As Amazon works on its online grocery ordering program, Walmart may need to make changes to stay competitive. However, store pickup has proven successful so far for Walmart. Customers don’t mind driving to their local Walmart to pick up an order. Amazon must devise a way to keep products refrigerated and fresh until customers can put the products away. This is a challenge Walmart will not have to deal with unless it implements home delivery at some point in the future.[/show_to]
