Friday, 23 February, 2018

Walmart's new lure: 'Pickup discounts'

Shopping carts are seen outside a new Wal Mart Express store in Chicago Walmart's new lure: 'Pickup discounts'
Nellie Chapman | 19 April, 2017, 00:42

The new feature was inspired by the Smart Cart technology developed by, the e-commerce retailer Walmart acquired in September. Walmart is no exception to this rule, but the retailer's latest discount idea trades a little customer convenience for potentially large savings. The company passes the savings to offer discount to customers, and hopes to bring customers to stores to make additional purchase. For the customer, it's a trip to Walmart, which many will be happy to do if they just saved tens or even hundreds of dollars. There would be no minimum if they had the orders delivered to a local store for pickup.

For Walmart, the hope with Pickup Discount is to lure shoppers into stores on the chance that they'll buy a few more things while they're inside. Heavy but low-cost items will get bigger price cuts. A Britax infant vehicle seat going for $148.05 will get a discount of $7.40 for in-store pickup, bringing the price to $140.65. Pickup Discount is only available for online orders picked up at Wal-Mart stores within the lower 48 states. It was the most expensive aspect of filling online orders, sometimes exceeding 50 per cent of an item's total delivery cost, according to McKinsey & Company.

Though O'Shea said the jury's still out on whether Jet was worth the $3.3 billion Wal-Mart paid, the retailer's almost 30 percent online sales growth over the holidays was "pretty meaningful", he said.

Discounts that will start on 10,000 products will be expanded to more than 1 million popular items online by the end of June 2017.

"Quite simply, it costs less for us to ship to stores", said Marc Lore, who heads Walmart's e-commerce business.

The Walmart Pickup Discount was announced by Marc Lore, the President and CEO of its USA eCommerce division, in a blog post. sweetens the pot for example by giving a discount if shoppers forfeit the right to return an item, or pay with a debit card instead of a credit card. It wouldn't be surprising to see Walmart offer curbside for some of the smaller online sales in the future, given that most of the kinks have already been worked out - ranging from staffing to alerts to even the parking spaces needed to serve the pickup customers.

The new pickup discount complements the Walmart's Online Grocery Pickup service, which is now in 600 stores.

More importantly, while Walmart is promoting the initiative as a way for customers to save, it may actually be a basic upselling strategy for the company.

As the chart above shows, Walmart has been witnessing strong growth in its e-commerce division.