Wal-Mart Stores Inc. is adding five grocery-pickup test locations to Northwest Arkansas this month.
Home office employees were informed of the updated testing of grocery home shopping Tuesday, the same day that competitor Target revealed plans for a delivery partnership with Instacart in Minneapolis, where it is headquartered.
All of the new Northwest Arkansas pickup locations will be run in conjunction with Neighborhood Markets, and the service begins Sept. 23. Bentonville will have two stores where pickup is available, along with one store each in Fayetteville, Rogers and Springdale.
"We know customers are looking for convenient, hassle-free shopping," Wal-Mart spokesman John Forrest Ales said. "They want that seamless integration of digital and physical; they want to shop when, where and how they want. We're excited to try new ways to make that possible."
About 10,000 grocery items and consumables are available through orders placed on the Wal-Mart website. Pickup will be offered at the following stores in Benton and Washington counties:
*Fayetteville, 2690 E. Citizens Drive.
*Springdale, 4900 Jennifer Terrace.
*Rogers, 808 W. Walnut St.
*Bentonville, 1703 E. Central Ave.
*Bentonville, 1400 N. Walton Blvd.
Ales said the retailer is continuing to evaluate markets where additional testing might take place.
Tests of delivery and pickup options for Wal-Mart customers in the U.S. have been ongoing in five markets, including in San Jose, Calif.; Denver; and Huntsville, Ala. Bentonville has a stand-alone pickup grocery location it has been testing since last year.
Wal-Mart added a mobile grocery service to a pair of Phoenix office parks in June. Testing in Phoenix began with three stores in February and has expanded to 17 stores in the market.
Retailers view innovations in grocery as a largely untapped segment in the United States. Wal-Mart, through its United Kingdom grocery chain Asda, has been offering the service for decades but is ramping up its efforts in the U.S. Grocery sales make up about 56 percent of Wal-Mart's U.S. revenue.
Field Agent, a Fayetteville-based retail research firm, released the results of a study titled "Grocery 2.0" on Tuesday. Shopping habits and preferences of 500 consumers were studied by Field Agent to establish what opportunities exist in what is described as a "grocery and convenience item market as high as $1 trillion."
Interest in online grocery shopping doesn't appear to be driven by dissatisfaction with the in-store experience, according to the study. Field Agent's study showed that 75 percent of shoppers viewed their experiences as either "completely" or "very" acceptable, and none reported in-store shopping as "not at all acceptable."
Still, 71 percent of those surveyed agreed they are looking for upgrades in shopping. Grocery delivery services had been used by only 20 percent of respondents, but 70 percent said they are at least "moderately likely to use grocery pickup in the future."
"For most part it seemed that shoppers are content with traditional grocery shopping. But when you ask specifically or directly, they typically say that they are looking for innovation and new methods of shopping and delivery," Field Agent marketing manager Chris Medenwald said. "Things are prime for change. I fell like we're on the brink of a new age for grocery shopping."
Insights gleaned from the study reveal customers are concerned with two primary areas as it relates to delivery or pickup options.
As other studies and anecdotal evidence suggest, shoppers are still trying to get used to the idea of somebody else picking out their produce and fresh items. Nearly 70 percent said the inability to "see/touch/smell groceries" left them less likely to use the service.
Topping the list of concerns was the idea that shoppers are sacrificing the ability to save the maximum amount of money by shopping online. Going into stores allows customers to use coupons or to spot deals that they might miss online, according to 91 percent of those surveyed.
Ales, the Wal-Mart spokesman, said the retailer isn't charging an additional price for pickup service.
While grocery home shopping is an emerging practice for retailers and, in many cases, still in a testing phase, Medenwald said shoppers have high expectations for the services. They expect deals, access to a strong assortment and same-day delivery or pickup for their orders.
Customers have been conditioned by other shopping experiences online, Medenwald said. Field Agent CEO Rick West said the study confirms that consumers are becoming more conditioned to use technology as part of the buying experience and expect to be able to shop online for more than general merchandise.
"Shoppers today are more connected than ever, opening up new avenues for selling something even as challenging and traditional as groceries," West said. "Wal-Mart and other retailers are ahead of the curve. They won't have to react to this growing trend toward online grocery shopping because they're leading the way. And Target's announcement today that it will enter the grocery delivery business is just the latest indicator that the grocery industry is undergoing radical change."
Winning the battle for consumers' online grocery spending will come down to quality, accuracy and timeliness, said Carol Spieckerman, president of retail strategy firm newmarketbuilders. Amazon.com has shown, through nongrocery categories, what is possible online with categories that used to be viewed as "off-limits" to e-commerce.
"Initially, skeptical delivery users will look for something to go wrong; those who are invested in convenience will overlook minor problems," Spieckerman said. "Retailers would do well to underpromise and overdeliver. Doing so will build a foundation of trust that will translate to loyalty and, on a larger scale, to wide consumer adoption of grocery delivery and pickup."
Business on 09/16/2015