Amazon not only sold $2.5 billion worth of goods, it introduced Prime members to new services. How should rivals compete in 2017?
The retailer says it will expand shipping options through two programs.
Wal-Mart Stores Inc. says that on Thursday it will expand a pilot that allows consumers to purchase items online and have them shipped for free to a FedEx Office location. The retail giant also announced that later this month it will expand a test that allows consumers who place an order online to pick up that item the same day from nearly 800 Wal-Mart stores in large metropolitan areas throughout the United States.
The “FedEx Site to Store,” which has already launched in Los Angeles and Boston, will expand to FedEx Office locations in New York, San Francisco, Chicago and Washington, D.C. Wal-Mart worked with FedEx to choose locations that are not near a Wal-Mart bricks-and-mortar store, says a company spokesman.
"'FedEx Site to Store' gives customers who don’t live near a Wal-Mart store access to Wal-Mart savings at a convenient local location," says the spokesman.
The FedEx program marks the first time a large U.S. retailer has developed a program that leverages another retailer’s locations—in this case, FedEx office locations—for its fulfillment, says Fiona Dias, executive vice president of strategy and marketing at e-commerce platform provider GSI Commerce Inc.
“Obviously Wal-Mart is frustrated with trying to build stores in cities and this is an end run around that,” she says. “And, from a practical perspective, people want same-day delivery or something close to that and this allows them to meet that consumer demand.”
The “Pick Up Today” offering is available for consumers buying electronics, video games and household appliances. Wal-Mart says that online orders are usually ready for pickup within about four hours and orders placed after 6 p.m. will be ready by 10 a.m. the following day.
While the same-day pickup option is not revolutionary, says Dias, it does help the retailer meet the ever-increasing consumer expectations that have grown due to similar offering at a number of retailers. For instance, Best Buy Co. recently improved its buy online, pickup in-store offering by aiming to make in-stock items available for pickup within 45 minutes of an order being placed, as well as shipping out-of-stock products to any Best Buy store for pickup without charging shipping fees.
“Every year the leaders innovate and the bar rises higher,” she says. “So whether a retailer has a little site or a big site doesn’t matter. If a consumer sees a cool new thing that reduces the hassle of making a purchase online, the next time he goes to another site, he’ll want and expect the same thing because his expectation has been raised.”
Wal-Mart is No. 6 in the Internet Retailer Top 500 Guide, while Best Buy is No. 10.