Retail Management 12th Edition by Barry Berman ,Joel Evans

Exercise 23

Case 3: Testing Channel Formats at Wal-Mart
After eight quarters with negative comparable store sales, Wal-Mart (www.walmart.com) began to look more seriously at multi-channel alternatives as a means of reversing this decline. Wal-Mart hopes that its thousands of retail stores and its online operations can become better integrated to increase shopper convenience. Wal-Mart's CEO believes that better coordination between the stores and the Internet can deliver "immediacy" in a way that clicks-only retailers cannot match. As an example, a Wal-Mart consumer can search the Web for product information, determine if a local store has the item in stock, order the good online, and then pick it up in a convenient local store.
The following illustrate some of the research initiatives Wal-Mart has undertaken with regard to expanding its multichannel capabilities:
"Wal-Mart to Go" grocery delivery-Wal-Mart tested home delivery of online groceries in San Jose, California. Customers could browse Wal-Mart's product availability by brand and type of product. Online orders were delivered for a $5 to $10 fee. This concept has now been expanded into several areas served by Wal-Mart.
Mobile shopping-With Wal-Mart's "My Holiday" app, shoppers can purchase goods through their mobile Walmart.com page. In early 2011, Wal-Mart introduced a Mobile Pharmacy that enables consumers to refill prescriptions by placing orders from their phone.
Free delivery to FedEx locations-As of March 2011, Wal-Mart began a delivery program that ships goods to 180 FedEx locations in New York City, San Francisco, Chicago, Boston, Washington, D.C., and Los Angeles. This program is aimed at delivering goods to shoppers in areas where customers prefer not to leave the package at their door.
"Pick-Up Today" online order-to-store service- Customers can order online and then pick up the merchandise at a local Wal-Mart. In March 2011, Wal-Mart expanded this service to cover 40,000 items, including electronics, toys, baby goods, and hardware.
Mobile commerce-Wal-Mart is experimenting with mobile checkouts that enable smart phone owners to check out using their phone instead of a store-based self-checkout unit.
Social commerce-Wal-Mart recently bought Kosmix, a social media filtering company.
While Wal-Mart's strategies reflect changes in technology and in the ways consumers shop, they are not guaranteed to be successful. Some are copies of successful strategies used by competitors (such as Peapod's grocery delivery or Best Buy's order online and pickup in the store). Other strategies can only work in selected areas. For example, "Walmart to Go" Grocery Delivery is most feasible in markets with high-population densities, such as cities and nearby suburbs. It also remains to be seen whether consumers will order perishables like fruits and vegetables from a Wal-Mart Web site without being able to inspect these goods for freshness or ripeness. Lastly, in some of these activities, like mobile apps, Wal-Mart is not a technological leader; and some retail analysts feel that Free Delivery to FedEx locations better enable Wal-Mart to serve urban areas where it does not have sufficient stores.
1. From the customer's perspective, evaluate Wal-Mart's "Wal-Mart to Go" and mobile shopping multi-channel strategies.
2. From the customer's perspective, discuss the relative benefits of Wal-Mart's free delivery to FedEx locations and its "Pick-Up Today online order-to-store service strategies."
3. What customer-based criteria would you use to evaluate whether Wal-Mart succeeds with its new efforts
4. What information should Wal-Mart compile about smart phone transactions How should it use the information