Walmart's Drive-Through Grocery Concept Is A Head Scratcher

Earlier this week, Walmart debuted its Walmart Pickup – Grocery service to registered customers in its hometown of Bentonville, AR. Plans to build and test the concept were announced earlier this year by former Walmart U.S. CEO Bill Simon.

The test concept, which is a free service, allows customers to place their orders online any time from two hours to three weeks in advance. Customers drive to the Walmart Pickup – Grocery warehouse and use a kiosk to notify attendants that they are ready to pick up their orders. Walmart associates bring orders out to customers’ cars. In total, shoppers have about 10,000 items to choose from, including dairy, meat and produce as well as HBC and household items.

“Shopping eats up time and can be a major inconvenience for parents with small children and the elderly and infirm,” Carol Spieckerman, CEO of newmarketbuilders, told The City Wire. “This is also a great way for Walmart to make the most of its digital platform, to acclimate more customers to using it and to gather more information on its customers’ searching and shopping habits as they place orders online.”

In an online discussion this week, the BrainTrust ofretail insiders at RetailWire debated the viability of Walmart’s click-and-collect service.

“Some research indicates that a good number of consumers prefer picking up their own orders, even when they order online,” said Camille Schuster, Ph.D., president of Global Collaborations, Inc. “This new format provides an opportunity for consumers to do that.”

Walmart Pickup – Grocery; Photo: Walmart

“You’re giving shoppers another way to shop at your store. As long as that way is profitable, what a great idea,” said Dr. Stephen Needel, managing partner at Advanced Simulations.

But Dr. Needel and others had concerns about the logistics associated both with launching and maintaining the format.

“It would be interesting to know if there needs to be new construction with a different type of facility (adding to the expense),” wrote Dr. Needel, “or if this will work out of regular Walmart stores.”

“No matter how this concept may be crafted utilizing technology and process efficiencies, there is still an additional cost component (labor, technology, space) that would be added to each item, either reducing the profit or increasing the consumer’s cost,” said Larry Negrich, VP of marketing at nGage Labs. “With margins thin in grocery to begin with, any long-term offering will mean increasing the cost to the customer and thereby losing some of the potential market.”

Logistics aside, some questioned if Walmart Pickup – Grocery is truly a step forward.

“It seems like we have been here before and tried this unsuccessfully in the past. What can we get from this that would lead us to think it will be successful this time around?” asked Ed Rosenbaum, CEO of Rainmaker Solutions. “Certainly there will be a number of shoppers who will prefer this. But for the average shopper and homemaker, this will not work. Especially when it comes from meats and perishables. We want to select our own, not have a clerk do it for us. I can visualize the shoppers at the return counters now.”

“Given the right demographics and the right operator, drive-through does make some sense,” said Ryan Matthews of Black Monk Consulting. “But it’s probably not going to be the tsunami wave of retailing’s future, more like a wave in the general direction of its past.”

“It’s hardly a new concept. Here in the Detroit area we have even had drive-through liquor stores for years, although that concept never did make all that much sense to me,” said Mr. Matthews.