Walmart’s domestic digital strategy seems to be working with customers.
The mega retailer surpassed 1,100 grocery delivery locations and more than 2,700 pickup locations in the U.S. in its second quarter 2020, while also expanding its NextDay delivery service to around 75% of the U.S. population to aggressively compete with Amazon.
Online grocery growth helped boost its U.S. e-commerce sales 37% in the quarter, holding steady from its previous quarter, while its Sam’s Club business also saw e-commerce sales jump 35%, up from 28% in its recent quarter.
"From a performance point of view, we're pleased with the strength we see in the business,” said Doug McMillon, president and CEO, Walmart. “Customers are responding to the improvements we're making, the productivity loop is working, and we're gaining market share. We're on track to exceed our original earnings expectations for the year, and that's possible because of the work our associates do every day."
Walmart has been attacking e-commerce with the over-arching goal of removing friction for its shoppers. It has been launching tests like its first Walmart Pickup Point, which opened last month in Lincolnwood, IL, where it only fulfills online orders through pickup or delivery options and isn’t open for customers to shop inside. Walmart also announced InHome Delivery in Q2, a move to deliver groceries and everyday essentials directly into shoppers’ homes. The service will launch this Fall in Pittsburgh, PA, Kansas City, MO, and Vero Beach, FL, offering about a million people the option for delivery drivers to enter the customer’s home and place their grocery order into their fridge even when they aren’t there.
At Sam’s Club, the retailer launched same-day pickup nationwide in July. Sam’s Club members who place orders through the website or the Sam’s Club app can now pick up orders of 15 items or less within four hours. And the service is free for members with no minimum dollar amount to order.
In addition, Sam’s Club launched its new Sam's Garage app nationwide, designed to dramatically cut the time it takes Sam’s Club customers to purchase a set of tires.
“What used to be a half-hour ordeal to buy tires will now take less than five minutes,” said McMillon during Walmart’s annual shareholders meeting in June. “We’re going from multiple systems, paper catalogs and a large desk to a user-friendly, member-grade app on a mobile tablet. We’ll give hundreds of thousands of hours back to members. This is what it looks like to be a digital company.”
While Walmart’s digital sales fared well this quarter as it strengthens its digital strategy, Walmart U.S. comp sales increased 2.8% and increased on a two-year stacked basis by 7.3%, which is the strongest growth the retail has had in more than 10 years.
Walmart’s moves to serve shoppers on their terms appear to be resonating with consumers.