By: Arthur Cooper
Submitted: 2011-04-26 14:58:27 | Word Count: 664
Much like other grocery stores that have tried this in the past, Wal-Mart is now attempting to offer an online grocery delivery service. In this first phase of testing, Wal-Mart will offer the service dubbed “Wal-Mart To Go” in San Jose, California. Customers will be able to access Walmart.com and select certain types of items for their shopping cart. These grocery items may include pharmacy products, healthy and beauty products, produce, frozen foods, baby related items, fresh meat and bakery goods. It is unclear as to when the testing phase will be completed. If the online delivery service does succeed in San Jose, you can expect to see more stores provide that service.
Large grocery store chains like Publix have tried to offer this service before. Many of them have been unsuccessful in this venture. The profit margin just couldn™t sustain the service, at least not in every area. Wal-Mart intends to beat the odds by offering the service to their customers. If Wal-Mart does find this new venture to be lucrative, they will only be expanding their grocery revenue which now accounts for over 50 percent of their yearly revenue. With more than $140 billion coming in from their grocery sector, Wal-Mart is no doubt looking to expand on their goldmine.
[ advertisement ]
Wal-Mart will definitely be taking a risk if they ultimately offer this service after the testing period. But I am pretty certain that they figure they have more to gain than to lose. This service could potentially expose Wal-Mart to new customers that would normally shop at other grocery store chains that already offer this kind of service, including Amazon Fresh. Providing an online grocery delivery service will also entice more people to purchase other non-grocery items through their website. An increase in web traffic and conversions can only add to profits and reduce all the costs that are associated with physically shopping in a Wal-Mart store. Wal-Mart can also track and use online shopping trends to improve advertising and sales.
The online grocery delivery business makes sense on paper but it doesn™t always pan out because of practicality. People often want to select their own produce and meat to guarantee freshness. I don™t know if I would want someone else picking out my strawberries, tomatoes and fish for me. I think that the reason why this kind of service ends up disappearing is because people are either limitedly interested in having someone select their food items and there is a persistent concern over the freshness of foods. The internet savvy demographic that would be more inclined to use this service is probably a younger, busy generation of shoppers that might not care too much about grocery shopping altogether.
No matter Wal-Mart decides to do, they are sure to boost their grocery profits. Last month Wal-Mart announced that they would be adding 8500 items in order to compete with stores that offer a variety of items, as opposed to just a large quantity of a few items. As Wal-Mart surges ahead to increase their revenue, customers need to speak up and tell the retail giant exactly what they want.
