Walmart is piloting a new store concept that is designed to serve the needs of in-store and online shoppers.
Creating the perfect omnichannel store
Walmart has several projects and roll-outs underway centred on reinventing its physical stores. These include a new concept Supercenter and a new-look front-end. This latest test is designed to help the retailer find solutions that help its stores operate as both physical shopping destinations and online fulfillment centres. Over recent years, Walmart has launched lab stores for its Sam’s Club and Neighborhood Market formats, enabling it to test technologies in a live store environment. The retailer is also using automated micro-fulfillment in a small number of locations.
Testing and iterating in real-time
Walmart has identified four stores where it will rotate new technology, digital tools and physical enhancements. Two stores are operational, with a further two to be added to the test. Product and technology teams are being embedded into the stores to prototype, test and iterate solutions in real-time, scaling what works and discontinuing what doesn’t.
Four key tests
Currently the retailer has four tests underway:
- Omni-assortment: starting with clothing, the retailer is making all the in-store assortment available online. It will extend this programme to other hard-to-manage categories to understand what it will take to make all items available online
- Inventory speed: the retailer is testing a new app which speeds up the time it takes to get items from the backroom to the salesfloor. The app uses augmented reality to highlight the boxes which are ready to go, rather than requiring a physical scan
- First-time pick rate: Walmart is testing how it can use a combination of in-store signage and handheld devices to help its associates navigate to the right locations when picking items for an online order. This is already delivering encouraging results; the percentage of times associates find the item on their first attempt has gone up by 20% in some of the categories that tend to be the hardest to pick
- Checkout-experience: the stores will build on a new experimental checkout experience introduced this year, testing different hardware and software solutions to help the business reimagine a contact-free checkout experience
Improving ecommerce profitability
Underlying all these tests is a focus on improving the profitability of ecommerce. Improving the efficiencies of store associates in picking and fulfilling orders on an incremental basis can deliver significant improvements over the long-term. In addition to these tests, the retailer is also focusing on improving the basket mix, recently making more non-food items available as part of its grocery pickup service, and driving incremental sales and profits through its digital marketing arm, Walmart Media Group.
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