“We’ve got 4,700 stores within ten miles of 90 percent of the US population,” says Walmart Ecommerce CEO Marc Lore. “In those locations, we’ve got about 100,000 products including fresh and frozen. We’ve started doing pickup a couple of years back and now same-day delivery to the door. We decided to take it a step further and actually deliver it directly into customers fridges and so far so good.”
Walmart Now Delivering Groceries Directly Into The Fridge
This (delivery to a customer’s fridge) is a great opportunity for Walmart to leverage this unique asset to do things that only Walmart can do. We’ve got 4,700 stores within ten miles of 90 percent of the US population. In those locations, we’ve got about 100,000 products including fresh and frozen. We’ve started doing pickup a couple of years back and now same-day delivery to the door. We decided to take it a step further and actually deliver it directly into customers fridges and so far so good.
I do think this is a great step change in the value proposition. Imagine going to work and coming home and having all the groceries stocked in your fridge. We just saw (in a previous trial using a third party) a really big opportunity to use our own Walmart associates to do the delivery. Their W-2 employees. They’ve been with Walmart for at least a year. We feel like that’s a big advantage.
Can Deliver All Purchases Into Your Home Without Packaging
We don’t actually need to have cameras in the home. The actual associate will have a camera on their vest. You could actually as a customer track on your app the associate going into your home, putting groceries into the fridge, and then leaving. You can look at it in real time or you can go back and look at it anytime you want. It’s very safe for customers as well.
There are lots of possibilities (that will stem from in-home deliver). For example, being able to do a return. Imagine just leaving something on your kitchen table. That’s it, going to work and coming home and we’ll just take it away from you. Also, being able to deliver general merchandise into your home without any packaging. I think there’re lots of opportunities for services and health and wellness and all sorts of opportunities. We’re thinking them through now. We have some ideas.
One Day Delivery Actually Costs Us Less Than Two Day
Next Day Delivery has been great so far. It’s down in the LA region right now. By the end of the year, we’ll have about 75 percent of the population will have access to Next Day Delivery. Typically, the cutoff time is around 3 p.m. If you order by 3 p.m. you will get it the next day in a single box. That’s the other great thing too. A lot of times now you might receive it in multiple packages. It’ll be overnight in one box. We are really excited about that.
It actually costs us less than Two Day Delivery. The big reason is that we’re able to get it in a single box. All this inventory is now mirrored or replicated close to the customer. If it’s close to the customer and it costs us less to ship it. If it’s one box it costs us less to ship as well. So yes It’s actually cheaper. We’re just being very measured in how we roll it out. By the end of the year, three-quarters of the country will have it. It’s gonna be moving pretty fast. About 40 of the top 50 metro areas will have access to it. So it’s about four or five areas a month that we’re adding.
Dramatically Improved Contributed Profit Margins
Right now, we’re in a really good position (regarding online profitability). Over the last year, we’ve dramatically improved our contributed profit margins. We’re starting to drive more mix into the higher margin categories like fashion and home. So feeling really good about the momentum we have. We have some dates in mind that we’re not obviously sharing. But we feel good about where we are right now. We feel really good about where we are and where we’re going.