Update: Wal-Mart Executives Focus On Small Stores, Online

by Marty Cook  on Friday, Jun. 6, 2014 1:30 pm  

Bill Simon, speaking at Friday's Wal-Mart annual meeting in Fayetteville.

“We’re trying to serve customers,” Simon said. “If customers want to be served that way and we’re not able to serve our customers through the larger stores, then we’ll build smaller stores. We’re thinking about it from a service-to-the-customer perspective. We’re not going to build things just because we don’t have them.”

Online

One form of service that was on most of the executives’ minds was online sales. Wal-Mart reported an increase of 30 percent to $10 billion in online sales in 2013, and officials projected another increase to $13 billion in 2014. 

As impressive as though numbers are, online giant Amazon reported a 22 percent increase to $74.5 billion in 2013.

Neil Ashe, the CEO of Global e-Commerce for Wal-Mart, started his session by showing a television commercial for a test program the company is running in Denver. Wal-Mart started a pilot program in San Francisco and San Jose in 2011 where customers could order groceries online and then have them delivered. The company has expanded the program to Denver.

In the TV spot, a shopper pulls into a Walmart parking lot, where an employee brings groceries to the customer’s car. Walmart is planning to open a similar pick-up test site in Bentonville and gave a tour of the facility on Thursday.

Wal-Mart has an active and successful grocery and pick-up and delivery service in England through the Asda supermarket chain. Ashe said the pick-up service has proved to be popular to Denver shoppers.

A year ago, Ashe had said he wasn’t sure if there was enough demand in the American market to implement a grocery delivery service.

“We are testing both delivery and pickup,” Ashe said. “I will tell you that pickup has grown faster than delivery at this point in Denver, which has been very interesting to us. One of the challenges with grocery delivery is obviously you have to have a time slot for that delivery.”

Ashe said it seems customers like the convenience of placing an order and then picking it up during the course of their day’s errands or on the way home from work.

“In a market like Denver, which is a driving market, it is proving to be very attractive … to have the convenience of picking up the order whenever she wants,” said Ashe, using the female shopper in the Denver commercial as an example. “We’re enthusiastic about that.”

Many analysts are predicting that online sales will continue to make up an increased percentage of overall sales for retail businesses. Ashe repeated the prediction that Wal-Mart expects to generate $13 billion in online sales this year.

And, even though Ashe is the head of Wal-Mart’s e-commerce division, he isn’t tied up in how sales are divided. Like Simon said, it’s about providing what the customer is requesting.

“Our goal is not to have a percentage of sales that is specifically e-commerce,” Ashe said. “Is Denver e-commerce or is it retail? I’m not sure it really matters. It is solving a problem for a customer in a new way that no one else can do. We want to do a lot more of that.

“If that ends up being 100 percent of our business that’s awesome.”

 

 

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