Walmart Canada’s ‘endless aisle’ latest salvo in war against Amazon
Retailer featuring more products online, rolling out click-and-collect service
Walmart Canada is moving a step further into Amazon’s territory at a most convenient time.
As Amazon makes a bold move into bricks-and-mortar fresh grocery retailing through its pending purchase of Whole Foods, the Canadian retailer is increasing the amount of products available on its Walmart.ca website in the next two months by opening it up to an “endless aisle” of third-party Marketplace sellers, making goods from outside brands and small businesses available for sale on its website.
“This has been in the works for a long time,” CEO Lee Tappenden, a 20-year veteran of the retailer who worked in a number of divisions around the globe before taking up the helm of the Canadian unit last June, said in an interview. “We will double the SKUS we have online at the launch date, and by early next year we will have millions of SKUs online.”
At the same time, Walmart Canada is launching in-store pickup for the goods it sells online, a model known in the industry as “click and collect.” It’s a draw for customers who want to save the cost of having items delivered to their homes. “Our plan is to have 100 stores with (the feature) by Christmas,” Tappenden said, and over time roll out the pick-up feature to the remainder of Walmart’s 410 stores across the country.
It comes well over a decade into a war between Amazon, a pioneer of marketplace selling in addition to its own offering of goods, and bigbox retailers such as Walmart and Best Buy, who have been dealing with Amazon and eBay’s encroachment into what was originally their biggest asset — a vast selection.
“Walmart was designed based on assortment, a one-stop shop, and this is still what it is today,” Tappenden said as he strolled through the aisles of the company’s Ancaster, Ont. outlet, which features the retailer’s newest digitally integrated store layout. “This is just making that transition to combine in store and online.”
Walmart’s U.S. division has been on an online acquisition tear of late in an aggressive bid to fight Amazon, acquiring e-commerce brands that are more upscale and fashionable than its in-store brands, womenswear site ModCloth, menswear site Bonobos and Shoes.com. As department stores and apparel specialists close stores at a record pace, it is predicted Amazon will be the biggest clothing seller in the U.S. by the end of the year.
Walmart.com in the U.S. opened up its distribution platform to third-party online Marketplace sellers in 2009, and Tappenden said the move will allow the Canadian unit to offer thousands of brands to consumers that are not on offer at Walmart. “Baby brands, toy, home, apparel — brands that would have an affinity with us.”
Buying online and picking up in store is a feature common to large retailers such as Canadian Tire and Staples. At the Ancaster store, the one outlet at which the program is up and running, Walmart Canada has already observed that consumers spend an average of 250 per cent more on click-andcollect orders than they do on an average transaction. The Ancaster location is piloting a host of other digital innovations, such as allowing customers to scan their own items while they shop and present the tally to a cashier at the end of the trip to speed up the checkout experience.
“If you are going to stay relevant to consumers at this point, this is the right response,” said George Minakakis, CEO at the Torontobased Inception Retail Group. “You need to bring the (storebased) business into Amazon’s environment.”
Walmart Canada, meanwhile, has been working diligently to try to maintain traffic at its stores. Fortuitously, the seeds were in place before the advent of online shopping: In 1987, Walmart U.S. made a game-changing move into fresh groceries, a category known for luring consumers to bricks and mortar stores at least once a week. The theory is, the more people come for groceries, the more likely it is they will buy general merchandise such as bed sheets and sneakers. Walmart began introducing food at its Canadian stores in 2006.
Since then, and despite the presence of much stronger incumbent grocery players, Walmart’s grocery business has grown to account for about half of its roughly $25.5 billion in annual sales in Canada, according to estimates.
“A lot of people who shop at Walmart every week say that they have a Walmart shopping list and then their grocery list,” Tappenden said. “The Walmart list would be laundry detergent, toothpaste, kitchen rolls” — everything but fresh food, he says.
But selling good meat, Tappenden adds, is the key to converting more of shoppers over to W al mart’ s fresh business. “If people are willing to buy meat from you, they are likely to have trust on produce, trust in grocery, trust on laundry.”
If you are going to stay relevant to consumers at this point, this is the right response.