CEO says Walmart's stores are the answer to Amazon – at least for groceries - RetailWire

Jul 16, 2019

by George Anderson

When it comes to fulfillment centers to handle online orders, Walmart with 20 warehouses is well behind Amazon’s 100. Walmart, however, has thousands of stores that also serve as distribution centers, particularly for grocery orders, dwarfing Amazon’s Whole Foods locations that offer Prime Now deliveries.

Walmart CEO Doug McMillon told attendees at Fortune’s Brainstorm Tech conference that his company now offers grocery pickup at 3,100 of the chain’s 4,500 stores. Home delivery is available from 1,600 locations.

“One of the realities of fresh and perishable food is if you don’t sell it, you throw it away or give it away,” Mr. McMillon said (via Fortune). “When you have a store environment and you have fresh or perishable food so close to people, those stores then become dual store and pick centers.”

Mr. McMillon’s attendance at the conference in Aspen, CO comes within a week of news that the company’s U.S. e-commerce division is expected to lose $1 billion this year. Walmart has aggressively sought to build up its digital capacity in recent years with a series of acquisitions, including Jet.com, Art.com, Bare Necessities, Bonobos, Eloquii, ModCloth, Moosejaw and Shoes.com.

Walmart, for its part, continues to invest in its online operations despite concerns about losses and even reports it may sell off some of the e-tail businesses it has acquired. In May, the retailer announced the launch of free, next-day shipping on a selection of 220,000 items with no membership fee. Amazon is rapidly expanding its next-day free shipping option for members of Prime.

DISCUSSION QUESTIONS: Is grocery the key to Walmart’s online fortunes? How will Walmart’s success or failure developing grocery affect the rest of what it is doing online?

Braintrust

"The right digital presence and customer interactions may just draw more traffic to Walmart stores (via BOPIS). That is where the company could really differentiate itself."