The world’s larger retailer, Wal-Mart Stores, Inc. (NYSE:WMT) is using its massive chain of stores to outperform Amazon.com, Inc. (NASDAQ:AMZN) in the online grocery segment and its efforts are paying off. Walmart is actually giving Amazon a run for its money by introducing a slew of new pickup stores for convenient deliveries.
In a pre-recorded earnings call last week, Walmart CEO Doug McMillon said the company just added 30 more grocery pickups in the US markets during the second quarter. The service is now available to more than 60 markets and virtually 400 locations in and around the US.
“It’s gratifying to see how much this service helps our customers save time,” McMillon said.
Walmart’s online grocery service works by enabling customers to place their grocery orders online. Customers can choose the time to pick up the orders and then pull in a designated parking area when arriving at a Walmart store. From there, an attendant will load up the groceries to the customer’s car.
The grocery chain is not done yet. A source familiar with the matter said the conglomerate is bent on rolling out the service to additional markets. But don’t expect Walmart to do heavy promotions on the service-the company wants to grow it from a grassroots perspective.
It seems like the strategy is working. Pictures of smiling customers started cropping up all over social media, most are young mothers. Approximately 90% of online users are repeat customers. The service is appealing to millenial moms in particular with baby products and diapers consistently being top sellers. Some of the most frequently ordered items are dairy, produce, and meats.
The reason why Walmart’s online grocery service is so popular among young mothers is that the service enables them to get out of the house with the baby in tow, pop their trunk once they arrive in store and have someone load the ordered items up.
Despite the onslaught of e-commerce, Walmart is able to keep up with its rivals, particularly its nemesis Amazon, thanks to a strong urban concept and robust contributions from perishable goods.
Walmart recently posted an excellent second quarter earnings, exceeding the street’s expectations. The retail chain also raised its annual guidance even as competitors were struggling to generate decent numbers. Walmart is also benefiting from the shutting down of poor performing stores and altering its merchandise combination. In addition, in-store sales open to more than one year were up for the 8th consecutive quarter.
Walmart recorded a net income of $3.8 billion, up 8.6% from last year’s comparable quarter. The world’s largest retailer also reported EPS of $1.21, well above analyst estimates of $1.02.
Although online sales are affecting volumes of brick and mortar chains, Walmart is countering it by offering new deals, smoother service and building an experience that its online service lacks. The company is also working to increase wages, revamp stores, and develop workplace culture to boost sales.