Grocery pickup, delivery could fuel Walmart’s online growth

Submitted photo
In-store pickup spaces were recently installed outside the Walmart store on Garland Groh Boulevard in Hagerstown, Md. The world’s largest retailer has installed 1,200 such spaces and plans to add 1,000 more at its stores across the country.

Walmart’s plans for online growth start with everyday items like groceries in everyday places like Hagerstown, Md., and Charles Town, W.Va.

The world’s largest retailer plans to reach a 40 percent U.S. online growth target by next year.

In a note to clients, Seth Sigman, an analyst at Credit Suisse, said Walmart’s latest moves — which include pickup service and a delivery option in many cities — might help it hit that target.

Market Insider reported that Sigman considers online grocery sales “largely an untapped market.”

“For (Walmart), given how early it is, we think it can lead to growth, and attain (online grocery) share well above their online market share today in other categories,” Sigman said in the article.

But the retail giant isn’t alone.

Amazon has offered a fee-based grocery delivery service, Amazon Fresh, since 2016. Recently Amazon has been getting some attention for its tests of a two-hour grocery delivery service from Whole Foods, which it acquired in June.

In December Target acquired a delivery platform, Shipt, to help it expand its delivery service across the nation.

In an interview, Walmart officials said their focus is on their shoppers, not on their competitors.

They said busy-working people, families with crowded schedules and people with limited mobility can all benefit from services such as to-your-vehicle pickup or delivery of orders placed online.

And they said the retailer’s network of brick-and-mortar stores is an asset, not a handicap, in providing those services.

The moves are “for the convenience of the customer,” said John Calloway, a market e-commerce manager for Walmart in this part of the country.

‘Five-minute service’

Walmart’s grocery pickup service is already in place in 1,200 stores, such as the Charles Town outlet. This year the company plans to add 1,000 more, including the Garland Groh facility.

Hagerstown officials recently issued a building permit that includes remodeling the Garland Groh store to accommodate the pickup service. Those changes included installing registers and checkout, building a pick-up area and remodeling the pick-up storage space.

“We are in the process of adding the logistics and hiring associates and training associates so we can deliver what we call online anytime pickup,” Joey Griffin, manager of the Garland Groh store, said in April.

People can order groceries online then stop by the Walmart store, where an associate will carry the bags to the customers’ vehicles, Calloway said.

He said the items are priced the same as they are for in-store shoppers. And there’s no additional charge for the to-your-vehicle trip.

“It’s a five-minute service,” Calloway said, and customers can check out the groceries to make sure the produce is fresh and the delivery matches the order.

The Charles Town store has added a canopy as part of the pickup program.

“This one (at Garland Groh) won’t have a canopy per se,” Calloway said. But it has an area designated for those driving in to pick up their orders.

For the analyst Sigman, a key to the pickup service is that traffic will still be coming to Walmart stories, giving the retailer an opportunity to move online shoppers into in-store traffic.

To your door, too

Walmart also made retail news recently when it announced it would roll out an online grocery delivery option in 100 U.S. cities.

That service was available at a half-dozen places in March.

Delivery options aren’t in the immediate plans for this area, but company reps say they are important for the retail giant’s overall plans.

The company calculates that 90 percent of Americans live within 10 miles of a Walmart store, and the retailer serves more than 150 million customers a week.

Reporting in Market Insider, Kimberly Chin wrote that Walmart’s brick-and-mortar stores give “the company a significant advantage over its competitors. Due to its proximity to customers, Walmart could use its physical locations as a distribution hub to leverage its supply chain and provide faster deliveries.”

Customers will be able to place orders at walmart.com/grocery or on the Walmart grocery app. Grocery delivery will carry a $9.95 fee and a $30 minimum order.

“We’re saving customers time by leveraging new technology, and connecting all the parts of our business into a single seamless shopping experience: great stores, easy pickup, fast delivery, and apps and websites that are simple to use,” Greg Foran, president and chief executive officer of Walmart U.S., said in a news release. “We’re serving our customers in ways that no one else can. Using our size and scale, we’re bringing the best of Walmart to customers across the country.”