An online sales programme linked to customer pickup is Walmart's latest aggressive market strategy. Banking on its vast network of stores (with around 4,700 in the US alone), the American Retail giant has decided to start offering a discount on products that customers buy online and ship to a Walmart store for pickup.
The company's $3.3 billion acquisition of Jet.com
, which took place last summer, is producing the results that it had hoped for, especially among younger consumers. Walmart's profile as an e-commerce retailer is becoming increasingly clear-cut. Its new strategy became clear as early as February with the launch of free delivery within two days for orders over $35, a first direct strike against Amazon.
Last week, Walmart fired the second salvo: a promotional campaign called Walmart Pickup Discount which rewards customers with discounts on products that they buy online and pick up in one of the chain's stores. The strategy is obvious: to offer the lowest possible prices. This differs from Amazon which is focusing on providing ever-faster deliveries. Taking advantage of its stores to provide discounts on online orders is an option that Amazon cannot offer. The discounts can be sizeable, such as a Lego set for $23.99 which is $2.55 cheaper than the same item purchased directly in-store.
April, the company has been offering pickup discounts on thousands of online products: ten thousand during the initial stage, with this figure expected to grow to over one million by the end of June. The reason behind the initiative is clear: Walmart already has the infrastructure in place to handle large quantities of products in its stores, including a fleet of 6,700 vehicles. Having an item available in store is much cheaper than shipping it directly to the customer, allowing Walmart to convert these savings into the pickup discount.
This new option was inspired by the Smart Cart technology designed by Jet.com, which uses a sophisticated algorithm to set the discounts, offering a variety of options to help customers save on their purchases. The new Pickup Discount complements Walmart's Online Grocery Pickup service, which is now available in 600 stores. The retailer plans to extend this service to 500 more stores in 2017.