Wal-Mart to Discount Some Online Orders When Picked Up at the Store
April 12 2017 - 12:30AM
Dow Jones News
By Sarah Nassauer
Wal-Mart Stores Inc. wants to make its brick-and-mortar stores a
stronger asset as it battles with Amazon.com Inc. online.
The Bentonville, Ark., retailer plans next week to offer
discounts on some online orders when customers opt for in-store
pickup instead of home delivery, a pricing structure it says passes
on the shipping costs it saves. The discounts will be available on
items that are only sold online, initially about 10,000 products,
like bulky car seats, that are expensive to ship to homes, said
Marc Lore, chief executive of Wal-Mart's U.S. e-commerce
division.
It is the latest sign that Wal-Mart, the second-largest online
retailer in the U.S. by traffic, is working to compete more
aggressively with Amazon for shoppers, after years of sluggish
online sales growth.
The system resembles a "smart basket" feature on discount online
retailer Jet.com Inc., the website founded by Mr. Lore that
Wal-Mart bought for $3.3 billion last year. The smart basket lets
shoppers choose to forgo returns, pay with a debit card and other
options that lower the price of the purchase.
Wal-Mart is far behind Amazon in terms of attracting online
shoppers, said Laura Kennedy, director of retail insights at Kantar
Retail. Nearly a third of Wal-Mart shoppers also shop weekly at
Amazon, while only about 13% of them go to Walmart.com that often,
according to Kantar data from last summer.
Wal-Mart, however, often beats Amazon when it comes to online
prices for everyday goods like food and toilet paper, Ms. Kennedy
said.
Many retailers with physical stores charge shipping fees for
delivery, but not for in-store pickup. Wal-Mart's new system is
different, Mr. Lore said, because the discount wouldn't apply
toward items available at the stores, since retrieving them from
shelves or backrooms adds labor costs.
The discount is limited to "online only" items, which Wal-Mart
can often deliver to stores with its network of distribution
centers and trucking fleets, saving money in the process, he said.
Such orders typically arrive at stores in two business days.
For example, a Britax car seat sold on Walmart.com for $148.05
would instead cost $140.65 if picked up at a store, while a Coleman
cooler will sell for $111.49 if delivered, but $107.03 if picked
up. Wal-Mart plans to make around one million products available
for the discount by June.
E-commerce has been a focus for Wal-Mart this year, with the
retailer buying up smaller sites such as ModCloth and Moosejaw that
tend to attract higher-income shoppers. It also tweaked its free
shipping policy, abandoning a membership offer for free, two-day
shipping that was similar to Amazon's popular Prime program. Now
two-day shipping is free on many Walmart.com items when a customer
spends at least $35.
It isn't yet clear how valuable Wal-Mart's online customers will
find variable pricing, Kantar's Ms. Kennedy said. In February, the
firm conducted a survey asking respondents what pricing gimmicks
they would accept, including agreeing to slower shipping or paying
with a debit card instead of a credit card. One-third said "I'm not
willing to jump through hoops to get a lower price."
Write to Sarah Nassauer at sarah.nassauer@wsj.com
(END) Dow Jones Newswires
April 12, 2017 00:15 ET (04:15 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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