Walmart: Digital innovation is priority No. 1

BENTONVILLE, Ark.—Walmart (NYSE:WMT) may have a store base of nearly 4,400 strong, but the focus for all divisions is integrating that store base with online operations and using brick-and-mortar stores to support digital.

Visiting media went on tours of Walmart's newest formats and showed off the best of traditional stores the day before Friday's annual shareholder meeting. And if there is one common theme running through them all, it's that stores are the anchor, tying together all of Walmart's digital efforts.

Walmart's first grocery pickup site is operational and busy, according to Ellen Martinez, operations manager. Shoppers are using the facility for groceries and to collect larger items purchased at Walmart.com.

Customers can select items online and choose a pickup time as soon as two hours from placing the order or up to three weeks in advance. Upon arrival, shoppers pull up to a kiosk, similar to a drive-thru at a bank, and check in with an order number or name. Customers then drive up to a designated bay, where orders are brought out to their car and loaded.

The Bentonville facility is the only location with inventory on-site, but Walmart has expanded the test to four additional markets: Huntsville, Alabama; Denver; Phoenix; and San Jose, California. The Phoenix test brings the service to office parking lots, allowing shoppers to collect items from a customized truck.

The tests have already yielded some promising results. Approximately 18 percent of Walmart shoppers using the service are now repeat customers, and grocery pickup boasts a 90 percent satisfaction rate. The program is also attracting new customers to Walmart—27 percent of the grocery pickup shoppers in San Jose, California, said they wouldn't have shopped at Walmart otherwise.  

Order pickup at Sam's Club is yielding similarly positive results. Small-business owners and club members are placing orders the day before, prompting stores to open as early as 7 a.m. to accommodate pickup orders, according to Sam's Club President and CEO Rosalind Brewer.

Sam's Club's service area is being reconfigured to accommodate online orders, with bins, baskets and refrigerated space devoted to waiting orders.

Walmart store formats are undergoing smaller changes, including shorter shelf heights, in-store pickup centers and newly designed optical departments. There is also a heightened focus on fresh foods and organic items. Keeping pace with trends is a mantra at Walmart these days, from healthier foods to an expanded selection of activewear.

But even more than providing shoppers with the products and services they want—and always at a low price—Walmart is most focused on integrating digital and physical. Clean, well-stocked stores are important and are increasingly essential in the distribution system as points of delivery for digital shoppers.

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