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Walmart flexes its grocery muscle in e-commerce

Study: Retail giant is swiftly winning over online shoppers

Walmart is quickly extending its grocery dominance in brick-and-mortar into the online realm.

Consumer market researcher Packaged Facts said Thursday that 23% of online grocery consumers cited Walmart as the retailer they use most for groceries. That’s second only to Amazon, named by 38% of purchasers, according to Packaged Facts’ “U.S. Grocery Market Focus: The Walmart Shopper” report.

About 27% of in-store grocery purchasers said Walmart is the brick-and-mortar retailer they get groceries from most — over two times as many as Kroger, the next most cited retailer, the study revealed.

In a relatively short time, Walmart has transformed itself into an omnichannel retailer by accelerating investment in e-commerce to develop a seamless shopping experience between its massive store base and digital properties, Packaged Facts noted. What’s more, Walmart has turned its thousands of stores — an apparent cost disadvantage versus pure-play online retailers — into a competitive strength in distribution, the researcher said.

For example, Walmart has already reaped dividends from its swift rollout of online grocery pickup. Of click-and-collect consumers surveyed this summer by Packaged Facts, 42% identified Walmart as the pickup location for their last order. Loyal Walmart online grocery buyers also are 30% more likely than the average e-grocery consumer to cite in-store pickup/curbside service as a chief factor in choosing an online grocery retailer.

Packaged Facts said loyal Walmart online grocery purchasers, too, are 75% less apt to name subscription/repeat ordering services as a factor in picking an online grocery provider. That’s an area where Walmart may need to improve, the researcher noted, since customers of rival Amazon are 45% more likely to deem subscription/repeat ordering services as a key factor.

By the close of its 2019 fiscal year at the end of January, Walmart expects to have 2,140 online grocery pickup sites, covering 69% of U.S. households, and online grocery delivery through 800 stores, covering about 40% of the population. The retailer is targeting about 3,100 curbside pickup and 1,600 delivery locations by the end of fiscal 2020.

Walmart recently said it expects to achieve its goal of 40% growth in U.S. e-commerce sales for fiscal 2019, and the company projects 35% growth for fiscal 2020.

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