Walmart announced the expansion of its online grocery delivery option to more than 40% of all U.S. households by the end of the year. Currently, the service is available in six markets and it will soon serve more than 100 metro areas.
The service includes all categories of groceries from fresh produce and bakery items to consumables and seasonal merchandise. Consumers can order online or through the Walmart Grocery App. The retailer also offers a grocery pickup service that allows customers to order online and pickup at the store from their cars.
“Walmart’s move into grocery delivery is a clear sign of the competitiveness in the e-grocery category, which has seen tremendous growth in the past year. It also showcases the company’s expanding delivery ambitions as it moves to compete more heavily in e-commerce and sync with the way today’s consumers shop," Karin Borchert, CEO of 1WorldSync, told FierceRetail. "However, e-grocery is a different approach than traditional grocery shopping. Quality, freshness, and ripeness are all factors consumers traditionally have control over when shopping in brick-and-mortar, but this is not the case when purchasing groceries online. Walmart will need to find a way to ensure their product information is trusted and accurate to meet the needs of consumers to be successful with this new endeavor."
In order to fulfill the expansion, Walmart employs more than 18,000 personal shoppers and more will be added in 2018. These associates are well trained through a three-week program that teaches skills such as picking products such as cuts of meat.
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It comes as no surprise that Walmart would announce such an investment, as it further validates retail's commitment to the grocery delivery model.
"Delivery is rapidly becoming a commodity service as every national and regional grocer has the opportunity to leverage third-party services such as Instacart to enable its home-delivery capabilities. As home delivery becomes a cost-of-entry capability, grocers who offer the quickest service, deliver the best produce and do it all at the lowest internal cost will be most successful," Jim Prewitt, GVP of product management at JDA Software, told FierceRetail.
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What still seems to remain as the unknown in this category is which model will win. There are those retailers, like Walmart, that are employing the picking and packing from within the company, and there are those, such as Kroger, who have chosen to work with third parties such as Instacart.
"Among the challenges that click-and-collect and home delivery create are inconvenience to in-store shoppers as the order pickers fill their orders. Staying in stock as demand from third parties picking online orders impacts product availability could be an issue, too," Prewitt noted. "Companies like Whole Foods may ultimately see less disruption and lower cost because they have greater visibility and control over the in-store picking process."