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As Walmart Launches Home Delivery, Smarter Selling Moves Back Home

Posted by Sheila Shayon on April 27, 2011 12:00 PM

The moment to target consumers is shifting – backwards, out of the store and back to the home.

About 62% of shoppers research online deals before heading out to shop at least 50% of the time according to survey results from Booz & Co. and the Grocery Manufacturers Association. 

This "know before you go" behavior is not new for more expensive purchases like home furnishings and electronics, but increasingly, it’s everyday products like food and drink, detergent and diapers, baby and pet food being researched at home before the shopping trip begins.

And when the world's biggest retailer ventures to customers' homes — well, time to head home to see what's going on.

Retailers of staple products are navigating lesser known waters as in-store campaigns, product displays, end-of-the-aisle promotions, even flashy packaging, are being replaced by social media: dynamic campaigns, digital couponing, and incentives for product reviews. Add "Buy now" buttons on Facebook, manufacturer websites, and blogger buzz and the next challenge of online versus bricks and mortar grows clearer.

"It's become a matter of, 'I need six things, who has the best price on them?' It takes 90 seconds to research that online, and that's how shoppers choose the store where they shop,” says Candace Corlett, president of WSL Strategic Retail, to the Wall Street Journal.

Driving the digital shift are the recent recession, more sophisticated search technology, and increased loyalty rewards programs. Eighty percent of women now consider the cost of "just about everything," adds Corlett, up from 64% three years ago, according to WSL shopper research.

Retail giant Wal-Mart has begun testing an online grocery delivery service in California: "Walmart To Go," which lets customers order online for home delivery, and customizes online circulars.

It offers “Fresh produce, meat and seafood, over-the-counter pharmacy, household supplies, health and beauty items and other basic household goods online. Delivery charges for the online delivery service start at $5. However, a minimum order of $49 is required.” 

For now the test is only in San Jose, close to Wal-Mart headquarters. The move is strategic not only in competing with online retailers Amazon and Safeway, or Fresh Direct and Peapod – but as a step towards combining web and store retailing.

The bulk of consumers today are poised somewhere between traditional TV marketing and online reach – forcing marketers to stretch in both directions.

Google’s local search queries for coupons, recipes and product reviews have consistently doubled or tripled in the past few years. "Those are just proxies for this more informed, more sophisticated shopper. The shopper is saying 'I can't really afford to be wrong,' " says Kevin Kells, Google's national industry director for consumer-product companies in the WSJ article.

The battle is for minds and wallets and hearts. The U.S. retail sector now comprises the largest “collective market” of loyalty reward program memberships, greater than travel/hospitality and financial services according to the 2009 Colloquy Loyalty Census.

"In our 2007 Loyalty Census white paper, we predicted the next loyalty battleground would be in retail, and we were right," said Colloquy partner Kelly Hlavinka.

"With the travel category in maturity and the financial services category likely to contract, we expect retailers to be at the forefront of innovative loyalty marketing for years to come."  

Convenience + cost-savings = consumer loyalty, and “know before you go” is the new shopper’s mantra.

Comments

John United States says:

MPB Today offers free groceries and delivery and they pay you for referrals for signing up and paying a one time fee. That sounds like a better deal then walmart

April 27, 2011 07:21 PM #

ed olsen United States says:

would love to see it offered in nh and ma.

ed

April 28, 2011 08:00 PM #

Teri Garner United States says:

My Mom lives in Santa Clara and received her first Walmart ToGo order today, she said that the meat, chicken and produce that she ordered were all good quality. The driver was super friendly and helped her to with the printed out receipt.
This is the first time she has ordered groceries on line and she was not comfortable  that she would not get to pick the vegetables herself, whoever picked the order must know my Mom !.

To top it all they did not have the garbage bags she asked for so they sent a different brand at the same price, she is already picking out her next week shopping.

May 3, 2011 11:52 PM #

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