Walmart Digs its Spurs into Amazon’s Side with Pickup Discounts, Simple but Effective

Walmart Neighborhood Market

Walmart has announced a unique discount plan for customers who order online and are ready to to pick up their items from a nearby Walmart store. The Pickup Discount, as Walmart – in an awe-inspiring moment of creativity – calls it, starts on April 19th and will be available initially on about 1000 items, and the company says that it plans to up that number to one million items by the end of June.

Walmart’s customers now have two choices: either they ship it to their home using the free two-day shipping program, or ship it to any Walmart store to pick up the product and save some more money.

The program is unique because it tries to exploit the strength of Walmart’s network of stores, while at the same time attempting to reduce the load on the most expensive part of the shipping journey: the last mile. By making the customer travel to the store, Walmart can pass on the shipping cost savings to the customer, meaning these items will cost even less if you order online and pick them up at the store.

It does remove a lot of the shipping headaches for the company by leveraging the 4,700 stores Walmart has across the country. Marc Lore, Walmart’s e-commerce chief, got straight to the point when discussing the advantage of making customers travel to the store:

“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.”

That’s a huge advantage that Walmart has over e-commerce giant Amazon. The problem for Amazon in the deliciously profitable grocery segment has always been its lack of physical footprint. And that’s possibly Walmart’s biggest strength.

Walmart Units in the United States

Walmart U.S. – 4,672 total units 

  • Supercenters (3,522)
  • Discount stores (415)
  • Neighborhood Markets (699)
  • Other (36)

Clearly, Marc Lore is all their stores into account, including supercenters, discount stores and Neighborhood Markets. By including Neighborhood Markets, the small-store format that Walmart is expanding at a steady pace, Walmart can get really close to the customers inside densely populated urban areas.

Supercenters, due to their size, are obviously located in the outskirts of the city, while the NMs are closer to where the people are. Customers who live next to a Neighborhood Market can order online, get their products to the store, which Walmart will ship in a truckload, they can go and pick that up and still enjoy the lowest price possible, because there is no last mile shipping cost added to the product price.

A few examples of Pickup Discounts provided by Walmart:

Simple, but effective, and definitely a thorn in Amazon’s side because it leverages the very thing Amazon lacks – a wide and deep physical presence across the country.

Thanks for reading our work! If you enjoyed it or found value, please share it using the social media share buttons on this page. If you have something to tell us, there’s a comments section right below, or you can contact@1redDrop.com us.

Source: Walmart