Walmart's Plan to Win in Online Grocery

In a presentation yesterday at Groceryshop in Las Vegas, Tom Ward, senior vice president of digital operations at Walmart, detailed how the retail giant is looking to grow its marketshare in online grocery. Specifically, Ward addressed how Walmart is working to make it as easy and fast as possible for its customers to use the retailer's grocery app to place orders, and then get their items either by picking them up or having them delivered.

For Walmart, the key to its success in online grocery depends on its ability to save its customers’ time. Every decision Ward and his team make take that requirement into account.

“Customers trust us to save them money, they need us to save them time,” said Ward. “Walmart’s Grocery app is built to do that.”

The Grocery app enables its users to customize the purchase journey that's most convenient for them at the time they're placing an order. Some features that Ward highlighted include the following:

• Grocery pickup: The customer places their order on the app, which is then passed on to a personal shopper in-store. Walmart currently has 30,000 associates serving as personal shoppers for online grocery orders. The personal shopper picks the order — they're trained on this job for several weeks to ensure they're picking the freshest produce, fruits and vegetables, Ward noted — and when the customer comes to the store to pick up their order, he or she checks in the on the app and the associate brings out their order within five minutes.
• Favorite items highlighted so they're easily found for re-ordering. In addition, relevant substitutions are presented when a user's favorite or first choice isn't available.
• Home delivery: Walmart is currently offering home delivery of groceries at 500 of its stores, with plans to ramp that number up in the near future. The customer builds their basket, and chooses home delivery (there is a transparent fee for delivery, Ward noted). Walmart is using a crowdsourced delivery model to help it get orders delivered to customers’ doors.
• Spark delivery: This last-mile delivery service was launched by Walmart in September. The crowd-sourced delivery platform provides drivers with the ability to sign up for windows of time that work best for their schedule as well as grocery delivery order details, navigation assistance and more.
• Pickup towers: These are an innovation in saving time, noted Ward. Free pickup of online orders is great, Ward said, but he you have to go into the store to complete the process. With its new Pickup Towers — which Ward described as high-tech giant orange vending machines — when users arrive they scan a barcode order confirmation on the app and their parcel comes out in roughly 10 seconds. Walmart expects to have more than 700 Pickup Towers located at its stores across the country by the end of the year.
• AJAX 2.0: Walmart has opened a pickup facility in Sherman, Texas. Customers picking up grocery orders pull into a bay and scan the barcode sent to their smartphone. A device inside the unit retrieves the order and dispenses it to the customer, with the entire automated process taking mere seconds. The pickup center allows for 24-hour dispensing of orders, including frozen, fresh and dry grocery products.
• Alphabot: Operational in a pilot store in Salem, NH, Alphabot uses robots for pick, storage and dispensing of online grocery orders. The robots can pick orders much more efficiently than personal shoppers.

Lessons Learned

Ward said it's become cliché to say fail fast, but Walmart plans to invest in technology in all areas and in all places. For example, the technology for its Pickup Towers comes from Estonia. The service — and the technology supporting it — needs to have a clear use case and benefit for customers, with that either being a reduction in cost and/or convenience created.

“Everything we hear from our customers is that they want to save time,” Ward said. “It’s not binary — people want to come to Walmart stores, but they want that level of convenience of that comes with shopping wherever they’re at.”