In the past couple of months, Wal-Mart
Wal-Mart ready to go
Retailers have used the Web to help boost in-store sales for a while now. Wal-Mart is doing its best to make the optimum use of this medium as well. It recently started testing an online grocery delivery service called Wal-Mart to Go. This program allows you to go online and select daily household and food products, add them to your cart, and then have the world's largest retailer deliver them to your doorstep.
This move adds to Wal-Mart's nationwide Pick-up-Today offer, which was launched nationally last month. In this program, you have to go to the store to pick up the selected items. Are these moves beginning to remind anyone of another big digital retailer?
Online sales: the good and the bad
The Wal-Mart to Go program is being tested first in San Jose, Calif., and has effectively been built to take on other online retailers such as Amazon.com
This is yet another effort by Wal-Mart to help rectify seven straight quarters of declining U.S. same-store sales, even as retailers such as Costco
Wal-Mart remained mum on the prospects of this program, its intended scale, and what it hopes to achieve with it. But this initiative may turn out to be fruitful for Wal-Mart in the long run, and looking at the popularity of online shopping sites such as Amazon and eBay
One major disadvantage in delivering is the rising cost of gas. If Wal-Mart can figure out an efficient way to deliver goods to consumers at a minimal cost, the program could be hugely beneficial. The company is notorious for its brilliant supply chain management and logistics, so it may find a competitive advantage here. I reckon it's a wait-and-watch game, to see how the test store performs and then see what steps to take.
This is not the first time grocers have resorted to online retailing. Grocers such as Safeway
Not everyone has embraced online retailing with open arms, though. SUPERVALU
The Foolish bottom line
Wal-Mart has taken another positive step to get back on track after some disappointing quarters. For now, as an investor, I'd say it's best to wait for the results of this test store.
Shubh Datta doesn't own shares of any of the companies mentioned in the article. Costco and Wal-Mart are Motley Fool Inside Value selections. Amazon.com, Costco, and eBay are Stock Advisor recommendations. Wal-Mart is a Global Gains pick. Wal-Mart is an Income Investor recommendation. Motley Fool Options has recommended buying calls on SUPERVALU. Motley Fool Options has recommended a diagonal call position on Wal-Mart. The Fool owns shares of Costco, SUPERVALU, and Wal-Mart. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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