Walmart discounts click-and-collect (WMT)

The promotion will begin next week covering 10,000 items, and will be extended to 1 million products by the end of June.

The discounts are aimed at reducing the cost of last-mile delivery, which will rise as Walmart increases its e-commerce efforts. Walmart is looking to encourage shoppers to opt for the discounts over the convenience of home delivery. The last mile of delivery — the final leg of delivering a package to a customer's doorstep — is the most expensive part of delivering goods because it involves shipping a large number of low volume orders to numerous locations. As Walmart pushes its e-commerce initiatives, it will face steep increases in shipping costs, and eliminating last-mile expenses is one way to create considerable savings.

This move is an about-face from the retail giant's latest effort to compete with Amazon on shipping. Walmart recently reduced its free shipping threshold to $35, offering free two-day shipping on orders over that amount. This policy replaced its subscription service, ShippingPass, with the hope of undercutting Amazon's Prime subscription. However, this may have threatened skyrocketing, and possibly unsustainable, shipping costs for the company. Walmart now appears to be pulling back from this strategy by encouraging shoppers to bypass delivery altogether. Moreover, the company could be planning to pass on some of its savings from lower shipping costs to shoppers in the form of additional discounts, staying true to its core offering — low prices.

Walmart might also be able to boost to in-store purchases through more click-and-collect orders. DSW reports that 15-20% of customers picking up an online order in-store end up buying an additional item. Walmart could encourage such purchases by moving convenience items — such as toothpaste or grab-and-go food items — to where customers pick up their orders.

Click and collect — a fulfillment option that lets shoppers place an online order and pick it up at a store — is thriving in the UK.

Over half of UK shoppers report having used this method in the past year

Here are some key takeaways from the report:

Click and collect is benefiting from consumer adoption of mobile commerce in the UK.
To grow click and collect in the US, retailers need to invest in their mobile presence and dedicate in-store resources to click and collect shoppers.

In full, the report:

Sizes the market for click and collect in both the UK and the US.
Identifies the key growth factors that are making click and collect successful in the UK.
Discusses key players in the UK that are seeing success with click and collect.
Presents some of the challenges the US faces in spurring adoption.
Outlines future opportunities for US retailers to grow sales via click and collect.

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