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To Lure Shoppers, Wal-Mart Tries Same-Day Delivery

Filed by KOSU News in Business.
November 21, 2012

With the holiday shopping season shifting into high gear, retailers are doing everything they can to win consumer dollars. Wal-Mart, the world’s largest retailer, is trying out one new strategy this season: same-day delivery. In a few select markets, it’s joining online retail giant Amazon and eBay’s “Now” service in offering super-quick delivery, straight to your door.

With a Wal-Mart store just three miles from my house, I could easily drive there to pick up some supplies for work. Instead, I decided to give the service a try. Wal-Mart is offering same-day delivery service, Walmart To Go, as a test during the holiday season in Northern Virginia, Minneapolis, San Jose, San Francisco and Philadelphia — where I live.

The website is pretty easy to use: Just create an account, click on the items you want — some batteries for my audio recorder, envelopes and some printer paper, for example — then pay for them. If you’re a thrifty shopper, this is where some sticker shock might come in: In most areas, the delivery fee is $10, no matter what you order.

Five hours later, the order arrived at my door, delivered via courier.

Reaching Customers Whenever They’re Ready

Like much of the rest of the retail world, Wal-Mart is trying out new ways of selling stuff. You can order online and have it delivered, as I did, or pick your items up at your local store. Wal-Mart spokesman Ravi Jariwala says you can even order online and pay cash at the store if you prefer.

“This is all about combining our national footprint of stores with our website to really offer customers anytime, anywhere access to Wal-Mart,” Jariwala says.

That may sound like just a sales pitch, but it signifies a real change in the retail world, says Barbara Kahn, a marketing professor at University of Pennsylvania’s Wharton School.

“Used to be [that] Wal-Mart planted a store in some location, you got in your car, you drove, when they were open. You bought, you packed it up … you drove home and unpacked it,” Kahn says.

But with a more competitive environment, she says, customers have a bit more power. Retailers want to make sure that whenever — and wherever — customers are ready to buy, their business is there and ready to sell.

A Potentially Pricey Experiment

Of course, there are limits. Because the goods are shipped from local stores, not warehouses, not everything Wal-Mart sells is available for same-day delivery. And if you live hours from Wal-Mart in a rural area, don’t expect same-day delivery anytime soon.

Kahn says urban shoppers are likely to value the service the most “because people may not have cars, so delivery might matter more.” And, she adds, the density of an urban customer base is likely to be more cost-effective for the retailer.

Other companies have had mixed results with delivery. It’s simply a lot more expensive to bring products to your customers, instead of the other way around. In Wal-Mart’s case, the company hasn’t committed to same-day delivery for the long-term, says spokesman Jariwala.

“We don’t have an end date in mind, but it will be available throughout this holiday season,” he says. “We’ll be evaluating and making further determinations at the end of the test.”

And there is one issue: returns. Turns out, I ordered the wrong-sized copy paper. So I went off to the store in my car anyway to exchange it. [Copyright 2012 National Public Radio]

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