Walmart recently debuted its Walmart Pickup–grocery warehouse to registered customers in the town Bentonville, AR. The test concept offers free service for customers to place their order online any time between two hours to three weeks in advanced. Customers can drive to the grocery warehouse to pickup their groceries by notifying attendants at a kiosk. This new way of grocery shopping will draw the attention of consumers that find shopping to be a major inconvenience.
Photo via Walmart
The service is a great way for Walmart to establish its digital platform amongst its customers. By targeting its online consumers, it provides convenience to parents with young children, seniors and individuals with disabilities. Using its online database, the company can gather information on its customers shopping habits, which will help the company gain insight on its target market. This new business strategy has a much higher cost structure because it would require additional cost to cover its labour and technology fees, which could potentially raise consumer’s cost or reduce company profit. While this approach can differentiate Walmart from other wholesalers, it may not satisfy all customers including average homemakers who typically select their own meats and perishables. The strategy could also jeopardize Walmart’s cost leadership strategy, since the profit margin for groceries are already so thin, the additional costs could potentially effect the company’s cost advantage. Walmart needs to prepare itself for further obstacles with its new initiative, but if they target the right demographics, its drive-through grocery could become a big hit in the future.
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