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Walmart moves to improve its in-store experience (WMT)

walmart e commerce
walmart e commerce

BI Intelligence

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Walmart is moving overnight stocking to the daytime in more than 430 of its small concept Neighborhood Market stores, the company announced in a blogpost.

This move follows a day-stocking pilot in 50 stores in the Tampa and Dallas areas, and will see the retailer utilize technology to make inventory management easier.

Despite Walmart’s reports of the pilot’s success, some employees are concerned about their ability to perform their jobs during business hours and about changing wages. Walmart said the vast majority of workers involved in the pilot had no issues.

Shifting stocking to daytime hours may bolster the shopping experience, with more employees available and more products stocked. Shoppers are more likely to find their desired product in stock if employees are stocking products throughout the day, as inventory should be adjusted as the day goes on. Additionally, with employees on hand to deal with stocking during these hours, there should be more store associates available to help customers with whatever they need. Walmart found this to be the case in the pilot locations, indicating this approach will improve Neighborhood Markets' customer service and shopping experience.

This will also likely help Walmart’s inventory management, especially with the technologies currently available, as the retailer continues to tighten up its supply chain. Walmart did not specify what kind of inventory management technology it will be introducing, but with options ranging from radio frequency identification (RFID) tags to in-store inventory robots, the company can surely find a method that fits its business, and allows it to lower inventory costs. Walmart has already gotten tougher on its suppliers to shore up its supply chain, and this move should further its aim to eliminate inefficiencies.

Walmart is likely looking for every cost advantage it can find, as it faces competition in retail and a growing number of rivals in grocery. The retail giant’s value to customers is largely in its low prices, but that advantage is under threat with competitors like Amazon challenging it in nearly all facets of its business. Even in grocery, one of Walmart’s coresegments, grocers like Lidl and Aldi are looking to challenge it on price, and Whole Foods has dropped prices with Amazon’s guidance. Walmart needs every supply chain innovation it can get to lower costs and keep prices competitive, and this latest effort could go a long way in helping it do so, while also providing a boost to customer loyalty.

Brick-and-mortar retailers are caught on the wrong side of the digital shift in retail, with many stuck in a dangerous cycle of falling foot traffic, declining comparable-store sales, and increasing store closures. Over 8,600 retail stores could close this year in the US — more than the previous two years combined, brokerage firm Credit Suisse said in a recent report. Meanwhile, e-commerce pureplays are riding the rise of digital commerce to success — none more so than Amazon, which accounted for 53% of online sales growth in the US last year, according to Slice Intelligence. 

In response, many brick-and-mortar retailers have started to use omnichannel fulfillment methods that leverage their store locations and in-store inventory in order to better compete in e-commerce. These omnichannel services, including ship-from-store and click-and-collect, can help retailers manage the transition to digital by:

  • Increasing online sales by offering cheaper, more convenient delivery options for online shoppers.

  • Limiting the growth of shipping costs as online sales volumes increase by leveraging store networks for delivery.

  • Keeping stores relevant by turning them into fulfillment centers that pull customers in to pick up online orders.

However, few retailers have mastered these new fulfillment services. While these companies have spent years optimizing their supply chain and logistics networks for delivering goods to their stores or directly to customers’ doorsteps, most have yet to figure out how to profitably bring their store locations into the e-commerce delivery process.

Jonathan Camhi, research analyst for BI Intelligence, Business Insider's premium research service, has laid out the case for why retailers must transition to an omnichannel fulfillment model, and the challenges complicating that transition for most companies. This omnichannel fulfillment report also detail the benefits and difficulties involved with specific omnichannel fulfillment services like click-and-collect, ship-to-store, and ship-from-store, providing examples of retailers that have experienced success and struggles with these methods. Lastly, it walks through the steps retailers need to take to optimize omnichannel fulfillment for lower costs and faster delivery times. 

Here are some of the key takeaways from the report:

  • Brick-and-mortar retailers must cut delivery times and costs to meet online shoppers’ expectations of free and fast shipping.

  • Omnichannel fulfillment services can help retailers achieve that goal while also keeping their stores relevant. 

  • However, few retailers have mastered these services, which has led to increasing shipping costs eating into their profit margins.

  • In order to optimize costs and realize the full benefits of these omnichannel services, retailers must undertake costly and time-consuming transformations of their logistics, inventory, and store systems and operations.

 In full, the report:

  • Details the benefits of omnichannel services like click-and-collect and ship-from-store, including lowering delivery times and costs, and driving in-store traffic and sales.

  • Provides examples of the successes and struggles various retailers have experienced with omnichannel delivery.

  • Explains why retailers are having trouble managing costs with their omnichannel fulfillment efforts, which are eating into their profits.

  • Lays out what steps retailers need to take to optimize costs for their omnichannel operations by placing inventory where it best meets customer demand.

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