April 12, 2017
Starting next week, Walmart shoppers will receive a discount on 10,000 online-only items if they elect to pick up their orders in-store.
Come June, the service will be available on more than 1 million items.
The discounts will vary based on the item's size and price.
The idea is to pass along the savings Walmart would have pocketed by not having to ship items directly to shoppers' doorsteps, Marc Lore, President and CEO, Walmart U.S. eCommerce told CNBC.
That's the most expensive piece of the delivery process.
But the discount also serves as a way to bring customers into its stores, where they could make an additional purchase.
The strategy comes as retailers are shuttering thousands of stores across the U.S. to boost their productivity.
"Stores are still an asset and Walmart is demonstrating that with this effort," Moody's analyst Charlie O'Shea said.
Walmart's price cuts will be determined by the same technology that powers Jet's Smart Cart.
It's based on an algorithm that considers variables like where the inventory is located.
Lore, the founder of Jet.com, who was named President and CEO of Walmart's U.S. e-commerce division after it acquired his start-up last year, is providing a peek into his vision, and this includes how he can use Walmart's massive store fleet operations to compete against Amazon.
Walmart Business: Empowering Customers with More Ways to Save - Introducing Pickup Discount
By Marc Lore, President and CEO, Walmart U.S. eCommerce
One of the things I love most about Walmart’s heritage is the maniacal focus on our customers and finding ways to offer them low prices - every day. We do this by creating efficiencies in our business so we can share the savings with them.
And, in the online world, we can use our physical stores and supply chain to do some pretty unique things for our digital customers.
That’s why I’m so excited to announce that, starting on April 19, we are going to begin offering a discount on eligible, online-only (non-store) items that customers buy online and ship to any Walmart store for pick up.
Pickup Discount* will initially be available on about 10,000 items. We will then roll out the discount to more than one million of the most popular items by the end of June.
We’re creating price transparency to empower customers to shop smarter and choose what’s best for them. Now, they can either pick up and save even more money, or ship two-day for free to home, without paying for a membership.
With Pickup Discount, we are beginning to take the ethos behind Jet’s Smart Cart and marrying it with Walmart’s operational efficiency to bring price transparency to life at Walmart.com.
But first, let me share a bit on how we are able to do this for our customers. We can remove the last mile delivery costs (that represent the lion’s share of the costs to ship products to customers’ homes) when we leverage our fleet of more than 6,700 trucks to deliver products directly from fulfillment centers to our 4,700 stores. This means, quite simply, it costs less for us to ship to stores. So, our customers should share in those savings.
Here’s how Pickup Discount works: Customers shop an item notated with "Pickup Discount" on Walmart.com and ship to their local store for pick up. These shoppers will then receive a discount based on each individual item. For example:
We are doing a lot to enhance the Pickup experience to make it even simpler and more convenient for customers. We’ve also been hard at work aggressively expanding our Online Grocery Pickup service which is now in 600 stores with an additional 500 coming this year.
We already offer great prices online. We do that every day. Offering a discount on Pickup demonstrates how we can take that to the next level by operating more efficiently and removing costs from the system to give customers even more ways to save.
*Pickup Discount will be available on eligible items on Walmart.com only. Discount will be available in the contiguous United States.
Related Article: The Five “New Rules” of e-Commerce Fulfillment