Business
2:34 am
Wed November 21, 2012

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

Originally published on Wed November 21, 2012 10:07 am

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 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

RENEE MONTAGNE, HOST:

This holiday shopping season, companies have devised many plans to make sure when you part with a dollar, it goes into their cash registers. The latest strategy: same-day delivery. The world's largest retailer, Wal-Mart, is going head-to-head with Amazon in offering quick delivery, but only in a few cities for now. NPR's Jeff Brady lives in one of them: Philadelphia.

JEFF BRADY, BYLINE: I need to order supplies for work: some batteries for my audio recorder, printer paper, some envelopes. There's a Wal-Mart store just about three miles from my house, and I could easily drive there, but I'm going to try this new same-day delivery service.

(SOUNDBITE OF TYPING)

BRADY: The website is pretty easy to use: Just create an account, click on the items you want, 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.

(SOUNDBITE OF DOORBELL RINGING)

BRADY: In my case, the order arrived about five hours later.

(SOUNDBITE OF DOOR OPENING)

UNIDENTIFIED MAN: Hi.

BRADY: Hey, there.

UNIDENTIFIED MAN: For you.

BRADY: Ah, OK. Is this the Wal-Mart one?

This same-day delivery service is a test Wal-Mart is conducting during the holiday season in four areas.

RAVI JARIWALA: In Northern Virginia, Philadelphia, Minneapolis and just recently this month, we activated San Jose and San Francisco.

BRADY: That's Wal-Mart spokesman Ravi Jariwala. Wal-Mart, along with much of the rest of the retail world, is trying out new ways of selling stuff. You can order online and have it delivered, or pick it up at your local store. Jariwala says you can even order online and pay cash at the store if you prefer.

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

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

BARBARA KAHN: Used to be, Wal-Mart, you know, planted a store in some location. You got in your car, you drove when they were open. You bought. You packed it up or whatever you did in your car. You drove home and unpacked it.

BRADY: But with a more competitive environment, Kahn says customers have a bit more power. Retailers want to make sure whenever and wherever customers are ready to buy, they are there and ready to sell. Of course, there are limits. Not everything in the store is available for same-day delivery. And if you live in a rural area, hours from a Wal-Mart, don't expect same-day delivery anytime soon, says Kahn.

KAHN: The urban market is the one, A, that may value it the most, because people may not have cars, so delivery might matter more. And, two, the efficiencies and the density the customer base might make it a better cost proposition.

BRADY: Other companies have had mixed results with delivery. It's just a lot more expensive bringing products to your customers. Wal-Mart hasn't committed to same-day delivery for the long-term, says Jariwala.

JARIWALA: We just launched it a couple of weeks ago. So we're running it throughout the holiday season. We don't have an end date in mind, but it will be available throughout this holiday season. And we'll be making - you know, we'll be evaluating and making further determinations at the end of the test.

BRADY: One issue: returns. I ordered the wrong size copy paper - legal instead of letter. I ended up driving to the story anyway to exchange it. Jeff Brady, NPR News, Philadelphia. Transcript provided by NPR, Copyright NPR.

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