Walmart launches online discounts
QUITE SIMPLY, IT COSTS LESS FOR US TO SHIP TO STORES. SO, OUR CUSTOMERS SHOULD SHARE IN THOSE SAVINGS
Walmart will offer discounts on more than a million online-only items that customers then pick up at stores, part of an effort by the world’s largest retailer to challenge Amazon.com.
Taking another page from the Jet.com business it bought in 2016, Walmart will first cut prices on about 10,000 webonly items such as Britax car seats and Lego toys, according to a statement. The Pickup Discount programme, which starts on April 19, would expand to more than a million so-called “long tail” items by the end of June, the company said.
“With Pickup Discount, we are beginning to take the ethos behind Jet’s Smart Cart and marrying it with Walmart’s operational efficiency,” Walmart e-commerce business head Marc Lore said, referring to the business model he pioneered at Jet, where customers got discounts for agreeing to package items together, or forgo returns.
“Quite simply, it costs less for us to ship to stores. So, our customers should share in those savings,” he said.
The move is Lore’s latest step to check Amazon’s growing online dominance and shows how he is keen to meld Jet’s innovations with Walmart’s 4,700-store network.
Earlier in 2017, Walmart scrapped a free-shipping programme that competed with Amazon’s Prime membership and replaced it with free twoday deliveries for orders of at least $35.
Amazon would control half of the US e-commerce market by 2021, said Needham analysts. They estimate that the online giant currently commands 34%, compared with Walmart’s less than 5%.
SHIPPING THE ORDERS
The discounts vary by item and reflect the savings to Walmart for shipping the orders to its stores on one of its more than 6,700 trucks, rather than to a customer’s house.
In an interview, Lore called the programme a “gamechanger” and said the level of discounts could be adjusted going forward. “Part of the reason why we are launching 10,000 products to start and growing it over time is that we want to perfect that discount.”
Walmart’s online sales rose 29% in the last quarter, helping its holiday results top estimates. So-called click-and-collect orders, which are picked up kerbside at stores, increased 27% in the period.