Walmart tests new delivery drop-off point — the customer’s fridge
Walmart’s new grocery delivery program could give it a huge edge in the online ordering game.
The discount giant is testing a concept that will not only deliver fresh groceries, but also enable a delivery person to enter customers’ homes and put away perishables in their refrigerator. Walmart, which announced the news in a blog on its website, is partnering with August Home, a smart locks and smart home accessories provider, and same-day delivery company Deliv, to test the service.
Here’s how it works: Customers place their order online, and when the order is ready, a Deliv driver delivers it to the shopper’s home. If no one answers the doorbell, the driver enters a pre-authorized one-time passcode into a smart lock keypad installed beside the door.
Customers receive a smartphone notification that the delivery is occurring, and they can monitor the delivery through home security cameras integrated with the August security app. Non-perishable items are left in the foyer, and fresh merchandise is placed into the shopper’s fridge. Once the Deliv associate leaves, the customer receives a notification confirming the delivery is complete and the door was automatically locked.
The concept is being tested among a handful of August Home customers in Silicon Valley.
“We want to do more in the future by delivering groceries and other orders in whatever location works best for our customers – inside the house for some and in the fridge/freezer in the garage for others,” Sloan Eddleston, VP, Walmart e-commerce strategy & business operations, said in the blog.
“What might seem novel today could be the standard tomorrow,” she added. “This may not be for everyone – and certainly not right away – but we want to offer customers the opportunity to participate in tests today, and help us shape what commerce will look like in the future.”
The program rivals similar services that use lockers as delivery drop-off destinations, such as those offered by Amazon. To expand its breadth among more shoppers, the online giant also recently launched The Hub by Amazon, a delivery locker system designed for apartment blocks and other housing complexes that may not have services to accept or store packages.
Jet.com, Walmart’s e-commerce operation launched a similar program through a partnership with Latch, a provider of smart building access technologies. The program enables participating residents to use their smartphone as a “remote key” to grant access to delivery companies dropping off packages, even if they are not home. The program is in 1,000 buildings in New York City.
However, neither Amazon nor Jet’s programs are equipped to store fresh merchandise.
To see a video of the new Walmart delivery pilot, click here.
The impact of Hurricanes Harvey and Irma on retail sales
Hurricanes Harvey and Irma had a similar impact on retail sales and the toll was significant on online spending as well as spending in physical stores.
First Data found that Retail spending plummeted 58.7% week-over-week (43.7% year-over-year) in Houston and its surrounding areas at the peak of the hurricane, according to First Data, released two reports analyzing the magnitude of the impact that Hurricane Harvey and Hurricane Irma had on consumer spending. Across the state of Florida, spending dropped 55.7% week-over-week (or 39.1% year-over-year) at the apex of Hurricane Irma.
“Our data shows that consumer spending in both impacted regions followed a similar trajectory," said Rishi Chhabra, VP, information & analytics, First Data. "Spending increased the week before the hurricanes, with people stocking up on key items like gasoline and groceries, and dropped significantly during the storm. After the worst of the hurricanes, consumer spending rebounded as people began to rebuild.”
Both brick-and-mortar stores as well as e-commerce saw a significant drop in sales, First Data found. In Houston during the week of Hurricane Harvey, online spending dropped 41.4%. By comparison, total U.S. e-commerce business was down only 4.3% during the same week. Post-storm, Houston e-commerce sales continued to drag while national e-commerce sales rebounded.
The same was true for Hurricane Irma. In Miami, online activity started dropping the week before Irma, declining significantly by 39.3% during the week of the hurricane (U.S. online spending was up 3.9%). After the hurricane, Miami e-commerce sales increased 0.6%, dragging behind national spending which was up 12.9%.
Forrester: Online holiday spending to increase by double digits over last year
Overall positive economic conditions will propel retail sales online as well as of offline this coming holiday season.
That's according to a report by Forrester, which predicts that U.S. online holiday sales will grow 12% to reach $129 billion in 2017, compared to $115 billion last year. Offline holiday sales will inch up 0.3%, to reach $549 billion in 2017.
The total number of online holiday buyers in the U.S. will be 3% higher this year than it was last year, the report said. But the real firing power behind this year’s higher online holiday sales is increased spending. Online holiday shoppers will spend an average of $689, which is 8% more than in the 2016 holiday season.
With just four to six weeks to go before the official start of the 2017 holiday season, retailers must optimize service and functionality to deliver the best bang for their buck. Given the tight timeline, Forrester recommends that retailers focus their efforts on four key areas.
"Capping off months of planning, retailers must focus on four priorities before the holiday season kicks off," the report said. "Review your omnichannel fulfillment processes, re-tune your marketing plans, streamline your mobile checkout process, and craft your performance management strategy.