Walmart’s Online Pickup Plan

The Washington Post: “Walmart is America’s largest grocer, and its aggressive expansion of pickup services has turned its parking lots into a laboratory for the future of online grocery shopping — one of the trickiest puzzles in all of retail … With the pickup model, Walmart is testing whether its best weapon in this digital fight is its most old-school — and hardest to replicate — asset: a network of more than 4,600 stores.”

“It is counting on a different idea of convenience, one that caters to time-starved suburbanites who spend hours each day in their cars. Maybe for them swinging into a parking lot for a few minutes makes more sense than waiting around the house for a delivery … While Walmart does not disclose sales figures for online grocery pickup, it has taken the program from five markets to more than 80 nationally in the past year.”

“Walmart will have hurdles to clear as it aims to build the free service into a bigger business: For one, shoppers have often been reticent to buy groceries online because they are worried about the quality of the fresh meat and produce … Yet, if the pickup format keeps gaining customer affection, Walmart could be especially well-suited to ride the wave. About 90 percent of Americans live within 10 miles of a Walmart store.”

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Walmart & The Nexus of Hi-Tech and Hi-Touch

Walmart CIO Karenann Terrell: “We’ve observed that online customers have a very, very high level of satisfaction—above 90%—while for those shopping in the store, it isn’t nearly at that high level. We wanted to dig underneath and find out why. The convenience of online ordering, coupled with the special treatment online customers get when they come in person to pick up their orders, leads to a more satisfying experience.”

“We’ve hired dedicated personal shoppers to pick these online grocery orders for customers. They see these customers regularly and know their preferences and begin to know them personally. That has been a huge learning for us in how we will manage stores. One associate wrote a Happy Mother’s Day card to a single mom who visits every week and has a son with Down syndrome.”

“I’m so fascinated with the Internet of Things. It could make a huge difference operationally and with the improvement of the experience for customers … It’s real-time data about goods on the shelf at the time that the customer shops. On-shelf availability means what the customer wants is fully available to them. They don’t say, ‘I wanted Crest Pro Health toothpaste but they were out.’ The Internet of Things is going to rock the world of operational effectiveness.”

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Luxury of Privacy: Moda Operandi Madison

The New York Times: “Moda Operandi Madison, which occupies two floors of a 1910 townhouse on 64th Street just west of Madison Avenue, is not a shop as conventionally understood. It is a by-appointment showroom for the very few. Those invited to buy there — likely no more than 300 per year … will enter a store whose goods are customized to their sizes, tastes and tendencies, whose salespeople know the full history of their dealings with Moda Operandi online: what they bought, browsed, bookmarked, exchanged or returned (very little, according to the company).”

“In New York, the only indication from the outside that Moda Operandi Madison is open for business is one small street-facing window, behind which, inside a decorative inset frame, a single Giambattista Valli couture gown undulates slightly in a manufactured breeze … Inside, past the heavy curtains in the vestibule, Moda is a confectionary wonderland, a haven with gelato-colored walls and blush suede furniture … There is an on-site kitchen for when shopping and lunch coincide.”

Moda Operandi “plans an aggressive rollout worldwide, the next in Abu Dhabi in 2017. The rest of the Middle East, Hong Kong and South Korea are on the horizon. The company plans to have 15 showrooms by 2021, the better to white-glove its customers where they live, as well as where they travel.”

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Rural Retail Joins Digital Age

The Wall Street Journal: “E-commerce hasn’t just reached rural America, it is transforming it by giving small-town residents an opportunity to buy staples online at a cheaper price than the local supermarket. It also provides remote areas with big-city conveniences and the latest products. Contemporary fashion, such as Victoria Secret bathing suits or Tory Burch ballet flats—items that can’t be found at Dollar General—are easily shipped.”

“According to Kantar Retail, about 73% of rural consumers—defined as those who drive at least 10 miles for everyday shopping—are now buying online versus 68% two years ago. Last year, 30% were members of Amazon Prime, up from 22% in 2014 … A Wal-Mart built in 1982 in Altus, Okla. … brought residents choice, convenience and low prices. Now, online shopping is creating another retail revolution here that doesn’t require a half-hour drive to Wal-Mart or roughly 2½-hour drive to Oklahoma City … ”

“E-commerce has provided new opportunities for area residents to earn money. In Willow, Okla., Anneliese Rogers, a mother of three, raised $1,500 in one sitting by selling items from her closet on Facebook. Nearby, Kassandra Bruton mails up to 100 packages a week from her clothing store Trailer Trash … E-commerce has changed life for Flowers Unlimited, the last remaining Mangum, Okla. florist and gift shop on the town’s square. While it has lost much of its bridal and baby registry business to online retailers, it has one big advantage: There is still a need for last-minute gifts, says owner Darla Heatly. ‘They can’t do e-commerce if they don’t plan ahead,’ she adds.”

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Shoparazzi & The Kmart Shopping Experience

The Wall Street Journal: “Kmart … recently overhauled one of its stores in a Chicago suburb. The Des Plaines, Ill., outlet introduced a modest grocery section with meat and fresh produce … Lowered aisle heights allow customers to see new department signs from across the store, and the layout was made to look more spacious by widening the aisles. On a recent Saturday, a filled the store to take advantage of giveaways and to admire a face-lift that includes new paint, brighter lights, less clutter and the wider aisles.”

Dan Macaluso, a shopper, comments: “It’s amazing what cleaning the floors and turning the lights on can do … It suddenly looks like they want to be in business.” Kmart CMO Kelly Cook explains: “We’re starting here … In the next couple of weeks we’re really going to drill down to understand every single aspect.”

The branch is testing a free personal shopping program called Shoparazzi. Through it, customers can place an online order for pickup—even asking for items Kmart doesn’t stock but which a personal shopper could acquire … Tricia Perrotti, a Kmart spokeswoman, said the Des Plaines renovation is part of a plan to better align marketing and the store experience.”

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Amazon: ‘Subscribe & Save’ or ‘Bait & Switch’?

The New York Times: What do subscriptions to a newspaper, magazine or Netflix account have in common? Once you sign up, you expect to pay the same rate every month. Yet that’s not the case at Amazon when you subscribe to its Subscribe & Save program, which automatically refills orders for household staples like instant coffee, napkins or trash bags.”

“Buried in the e-commerce company’s terms and conditions is that the Subscribe & Save discount is applied to the price of the item at the time that the order is placed. And on Amazon, prices change frequently — including sometimes rising.”

“In Amazon’s online forums, dozens of people posted about prices of Subscribe & Save items fluctuating, with some calling the program a ‘bait and switch’ subscription scheme. Amazon declined to comment. The company emails people 10 days before a recurring subscription delivery, when it informs customers of a new price of their item so they can change or skip the order. Any sticker shock, analysts said, may be the result of Amazon’s complex pricing system coming into conflict with consumer expectations of a traditional subscription.”

“Sucharita Mulpuru-Kodali, an analyst for Forrester Research who follows Amazon, said the retailer was probably pushing prices up to test how loyal customers are to products and how much more they are willing to pay for them. Yet the sharp price changes on Subscribe & Save items caught her by surprise.” She comments: “It doesn’t seem as customer-friendly as Amazon typically is. That’s what’s unusual.”

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Home Depot: Stores Are Fulfilling

The Wall Street Journal: “About 42% of Home Depot’s online orders and almost 90% of its online returns for the second quarter were handled by its stores, executives said this week as they announced a 9.3% increase in net profit to $2.4 billion, on a 6.6% increase in revenue.”

“Many in the retail industry believe fulfilling online orders from physical stores can be provide store owners an advantage over online competitors like Amazon.com Inc., allowing brick-and-mortar shops to serve as both showrooms and well-located mini-distribution centers.”

“Home Depot says it is aided in part by its existing delivery service, which previously only served in-store customers, and its investment into new order management software. Online purchases can now be delivered from more than 700 stores, faster and with shorter scheduled-delivery windows than previously possible.”

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Pop-Up Shops Help Malls Compete

The Wall Street Journal: “Mall landlords are turning to short-term retailers known as ‘pop-up stores’ to attract shoppers and boost revenue as department stores and other tenants struggle to combat the growth of online commerce … Pop-up stores that introduce local brands, perform demos and offer shoppers an elite selection of products or allow them to interact directly with designers can help drive traffic to other tenants.”

“One big potential category: online retailers that don’t yet have a substantial bricks-and-mortar presence … For other retailers, a temporary space is also a way for established brands to offer new services. Auto maker Audi AG introduced Audi on demand in a San Francisco pop-up store. The service lets customers book Audi coupes, sedans, SUVs and convertibles by the day and have them delivered within the city limits.”

“In Westfield San Francisco Centre, the owner set apart the entire fourth level for pop-up shops, events and co-working space. The mall, which houses Bloomingdale’s and retailers such as Burberry and Kate Spade, said this ‘Bespoke’ project had seen success at appealing to shoppers seeking alternative experiences at malls and businesses looking to test to their prototypes.”

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Home Depot: Retail ‘Oasis’ Against Amazon

The Wall Street Journal: “Do-it-yourself chains Home Depot Inc. and Lowe’s Cos. appear to have built a retail oasis mostly walled off from the reach of online behemoth Amazon.com … Executives from the home improvement chains cite a litany of favorable housing trends for their good fortunes. New households are being formed and housing turnover remains steady. Millennials are even willing to buy homes … All that spurs trips to large chains to pick out appliances and paint colors, and plan projects around the home.”

“But the e-commerce giant doesn’t have a toehold in large parts of the home improvement space, like lumber, paint and gardening supplies. Home Depot says just 25% of its business—smaller, easy-to-ship items like power drills and small hand tools—faces tough online competition.”

“That doesn’t mean either chain is immune to Amazon. A UBS survey in June found that 11% of consumers planning a home improvement project themselves planned to buy something from Amazon. That is far behind the 36% who said they planned to shop at Home Depot and the 21% at Lowe’s, but up from just 7% a few months back.”

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