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Walmart's curbside grocery pickup offering, which is set to be available from 3,100 stores by the end of the year, is gaining serious traction: Between 11% and 13% of Walmart customers use the service, and it will account for 33% of the retailer's digital sales by next year, per a report from Cowen and Company cited by Retail Dive.
Here's what it means: Walmart's curbside offering is becoming more important to both customers and the retailer itself.
- A majority of customers feel it saves them time and is an enjoyable experience. A resounding 76% of Walmart's grocery pickup customers said they saved time by shopping online, and a solid 64% felt the experience was an enjoyable one, according to data from Numerator cited by Retail Dive. This level of favorability bodes well for Walmart's chances of getting repeat business from the shoppers who give its curbside pickup a try.
- Shoppers are spending more when using curbside pickup. While the average spend per trip for in-store shoppers was $49.70, customers spent more than 2.5 times as much when shopping online for grocery pickup — $124.86 on average. This is good for Walmart and will likely encourage the retailer to continue its aggressive rollout of the offering to new areas: In early 2018, the retailer was offering pickup at 1,200 stores, but worked to grow this number to 2,200 by the end of 2018 and now has its sights set on 3,100 of its over 5,000 stores, leaving it more room to grow.
The bigger picture: Curbside pickup may be a powerful weapon in Walmart's fight against Amazon.
- Walmart's grocery pickup brings in several new customers, many of them Prime members. Between 40% and 60% of Walmart's curbside pickup sales come from new Walmart shoppers, per Cowen and Company as cited by Retail Dive. This statistic is likely helped along by the fact that curbside pickup carries no extra fee at Walmart, unlike with competitors (Kroger, for example, charges $4.95 per order, according to Retail Dive). Perhaps more importantly, Walmart's grocery pickup option may be poaching grocery customers from Amazon. Sixty-five percent of Walmart curbside customers surveyed by Numerator noted that they are also Prime members. This is problematic for Amazon, as it will need spending from Prime members — who have access to services like curbside pickup from Whole Foods and Prime Now grocery delivery — to push further into the grocery market.
- A popular curbside option can protect Walmart from customer attrition caused by Amazon's coming one-day shipping standard. Amazon's announcement that it will be making one-day shipping the standard speed for Prime members is a big issue for its retail competitors because, if consumers get used to that speed, they run the risk of seeming slow by comparison. However, curbside pickup is same-day — even faster than one-day shipping, and 33% of Walmart's digital sales are coming from the service currently. Walmart should consider making more products available for curbside pickup and push to get more of its sales from the service to shield itself from Amazon's one-day offering, even as it begins rolling out its own.
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