Walmart advances its omnichannel strategy in Mexico

Date : 16 February 2021

Oliver Butterworth

Retail Analyst

Shoppers’ needs have evolved in recent years and they increasingly want stores and online delivery services that can adapt to their busy lifestyles. This has been accelerated by the conditions of the pandemic, which have impacted mobility, creating a greater need for delivery.

In response, retailers are investing in ecommerce and re-prioritising their omnichannel strategies. Walmart Mexico (Walmex) has been particularly active in this space.

Here we explore how the business is strengthening its omnichannel strategy in Mexico, in alignment with its commitment to being the most trusted omnichannel retailer in the market.

Walmex launches new supermarket banner

In November 2020, Walmex launched its new supermarket banner, Walmart Express. Its strategy is to open stores close to the customer, to simplify the shopping experience and save customers time, to offer fresh and high-quality products at low prices, and to provide a fully omnichannel shopping experience.

Walmart Express stores give customers greater flexibility over how and when they place and collect online orders. They can process orders online (via the website), through the app, or in person at a Pickup counter inside the store. They can then collect the order either in-store, from the comfort of their car (using designated Pickup bays), or have it delivered to their home.

Source: Walmex

The addition of in-store digital kiosks enables customers to browse and order from Walmex’s extended online catalogue whilst in the physical store.

Source: Walmex

Launch of website for Bodega Aurrera

In May 2020, Walmex launched a dedicated website and mobile app for its Bodega Aurrera discount format. For now, this is limited to the sale of general merchandise. The offer consists of technology, white goods, sports equipment, home entertainment and more. The website offers a wider assortment of GM products than is available in-store, with many exclusively online products.

Customers can choose between home delivery or Pickup car collection from their closest Bodega Aurrera. In addition to placing orders through its website and app, shoppers can place orders from digital kiosks in over 600 Walmart stores (over 300 in Bodega Aurrera).

Source: Walmex

Trialling a grocery delivery service for Bodega Aurrera

In Q3 2020, Walmex began trialling its new grocery home delivery service ‘Despensa a tu casa’ (Pantry to your home). Initially, this was offered from 30 Bodega Aurrera stores, but due to popular demand was quickly extended to cover 100 stores, with plans to extend further.

Orders are currently placed over the phone, but we expect Walmex to transfer these to an app if there is a wide scale roll out of the service. Customers can order from most product categories, including perishables and frozen. Walmex offers same-day delivery slots, or express deliver in under an hour.

Source: Walmex

Partnering with technology businesses

Despensa a tu casa was developed in partnership with tech business Instaleap, who built a last mile logistics platform to Walmex’ specifications. Whilst some discounters in the region have partnered with last mile delivery businesses, Walmex has invested in software that allows it to self-fulfil and manage its own picking and deliveries.

This software supports them in offering an efficient, timely, and consistent delivery service. It also provides a way for Walmex to manage inventory and out-of-stocks in real time, which will be key if it starts to expand dark stores.  

Strengthening ecommerce logistics

Walmex has the most robust omnichannel logistics network in Mexico, which it continues to strengthen. At the start of 2020, it announced plans to construct five new distribution centres (DC’s). During 2020, it opened three, one in the State of Mexico, one in Mérida (south east Mexico), and one in Chihuahua (north west).

 “Since the announcement of our investment plan to strengthen our logistics network in December 2016, we have allocated close to 8 billion pesos (US$400m), [which allows] us to be more agile in the delivery of merchandise, both to homes and to our stores throughout the country”. Liliana Ávalos, Corporate Communications Manager, Walmex.

Walmex operates 19 DC’s, with two under construction. These are located in the south eastern state of Tobasco, and in Mexicali (on the border of Mexico and California). Both are scheduled to open in 2022.

Strong presence on social media

Bodega Aurrerá is one of Mexico’s biggest brands. It has strong presence on social media, with over 8.5m  followers on Facebook alone. It uses these platforms to engage with customers and advertise all its latest promotions.

Source: Walmex, Facebook

Compared to some of the other leading discounters in the region, Walmex is using more elaborate promotional campaigns, which are launched across several mediums simultaneously (in-store, on TV, through the website/app and on social media). This helps its campaigns land with maximum impact.

Impressive progress

Although Walmart has recently divested its interest elsewhere in Latin America, Mexico (along with Chile), remains a market of strategic significance for the retailer. Walmex is the leading omnichannel retailer in Mexico, and one of the most advanced in the region. 

It has made considerable progress over the last year and I have been highly impressed by its agility in responding to the pandemic, which has led to the roll out of new websites, delivery services, and a new store format. These actions will be key to setting the business up for success in 2021 and beyond.

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