Wal-Mart’s new in-store pick-up service might not be fast, but it’s free
Wal-Mart Stores Inc. is rolling out a new order online/pick up in store service. Dubbed “Site to Store,” it enables online buyers to purchase a product online and have it shipped for free to a store. Wal-Mart began rolling out the service today to 750 stores in 12 states.
The service gives customers access to specialized, higher ticket products, but the 7 to 10 business day delivery promise is not likely to impress veteran online shoppers used to faster delivery, experts say. The lengthy delivery time might reflect the logistics challenges the retailing giant faces, says Jim Okamura, senior partner at J.C. Williams Group Ltd., a Chicago-based retail consulting firm.
“Seven to 10 days seems like a long time. It’s not realistic with customer expectations for online shopping,” Okamura says. “They may be forced to move that up.”
But the shipping time matches Wal-Mart Stores shoppers’ habits, counters Mike Smith, Walmart.com’s director of store integration. “If most of them are in a store once a week, it fits for them,” he says. Smith cites Wal-Mart data that more than two-thirds of online customers visit a store once a week.
Wal-Mart piloted the Site to Store service in select locations beginning in 2004. Today’s rollout brings the service to New Mexico, Arkansas, Oklahoma, Kansas, Nebraska and Missouri, and areas of Texas, California, Colorado, Tennessee, Georgia and Mississippi. Wal-Mart will activate additional stores throughout the U.S. during the next several months with plans to complete the national rollout to more than 3,300 stores by late summer, Smith says.
Wal-Mart joins other chains that have offered order online/pick up in store for some time, including Sears Holdings Corp., Circuit City Stores Inc., Best Buy Inc. and REI. The first three offer order fulfillment from store inventory; REI`s service is similar to Wal-Mart`s in that a customer requests an item be shipped to a store for pick-up.
The new service gives Walmart.com customers access to tens of thousands of products, many more than are available in stores. Customers can buy online and have products shipped for free to their store of choice. So far, product categories include baby, electronics, home furnishings and sports.
Products available through the Site to Store program are higher ticket—and sometimes bulkier—items such as electronics and furniture. Product selection could reflect a move toward more upscale offerings, Okamura suggests. “Wal-Mart might be seeing how much they can elevate product assortments to `better and best` products rather than `good and better,`” he says.
Walmart.com’s Brian Osborn will speak at theInternet Retailer Conference & Exhibition, June 4-7 in San Jose, in a session titled Wal-Mart: The Giant Uses the Web to Extend its Market Reach.
Wal-Mart’s Smith says the products mirror customer response to such products already being sold in stores, albeit with a narrower selection. “We have seen greater interest in baby products and electronics and so we see this as a way to complement online what’s in the stores,” he says.
The biggest difference is that customers can see more than 60 cribs or 40 flat-panel televisions online rather than a couple of each in stores.
The Site to Store service is sound in concept, Okamura says. “Theoretically it seems like a good service. They aren’t cannibalizing their store sales. And there are a lot of people who will buy more products in the store while they are picking up an online order. Plus there is a broader range of products,” he says.
Many retailers have discussed such a service, but Okamura was surprised to see Wal-Mart take the plunge. “The discount sector is not where I would have anticipated it to begin,” he says. Implementation cost is one issue, but the bigger one is scale.
“Those stores are engineered to be very efficient, both front and back. Where do you put these goods? It’s really in getting the back of the store running efficiently that will make this work,” Okamura says, adding that Wal-Mart has the distribution know-how and technology to pull it off.
Smith concurs the company’s logistics network is the key to success. “Our trucks go to each store every day and we’ll be able to ride those trucks to get packages in the door,” he says.
Wal-Mart’s service might be a shot across the bow of other big box ships, but they aren’t likely to dive in quickly unless they’ve already laid the groundwork, experts say. “Other big box players will slowly test their versions, but this won’t create a stampede because back-end processes take a year or two to build, and that’s just to get to the pilot stage,” Okamura says. “Most of them have probably considered this approach and now maybe they will ask themselves if it’s time to test it."
J.C. Williams Group’s Maris Daugherty will speak at theInternet Retailer Conference & Exhibition, June 4-7 in San Jose, in a session titled Identifying the E-Retailing Solutions Shoppers Find Most Useful.
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