Wal-Mart Stores, Inc. (NYSE:WMT) To Soon Bring Online Grocery To Masses


Wal-Mart Stores, Inc. (NYSE:WMT) is expanding its online grocery business to eight additional markets, and that is only the beginning of what is to come. The company has plans to make its online grocery ordering and pickup service widely available to masses. Grocery is one category of products that has been slow to catch online, but Wal-Mart is hoping to change that.

Wal-Mart Stores, Inc. (NYSE:WMT) has figured out how to leverage its expansive physical presence to bolster its grocery e-commerce. In the latest move, the retailer is expanding is online grocery service to eight new markets. These new locations that will benefit from the online grocery service include North Carolina, Colorado Springs, Charlotte, Fayetteville, Nashville and Atlanta.

Initially, Wal-Mart’s online grocery service was available in Denver, Alabama, Northwest Arkansas, San Jose and Huntsville.

Wal-Mart pulls a rare strategy

In grocery e-commerce, Wal-Mart is not merely copying a tired script. The retailer is using pickup strategy where customers order items online and pick them up at designated locations. Pickup strategy favors Wal-Mart than perhaps all of its other competitors in the grocery retail business.

Wal-Mart boasts large store coverage in the U.S., which puts at least 75% of the U.S. population within five miles of its store location. Because of that, Wal-Mart can easily operate a pickup system for groceries. As such, the company is able to skirt the huge capital investment in building delivery system for its grocery e-commerce business. The likes of Amazon.com, Inc. (NASDAQ:AMZN) and Target Corporation (NYSE:TGT) aren’t as lucky.

Competitive advantage

By tapping into its physical location strength to promote online grocery business, Wal-Mart Stores, Inc. (NYSE:WMT) is able to pass down some of the cost benefits to consumers and lock out competitors from raiding its base. Moreover, the company is able to expand its online grocery services faster than rivals. That explains why Wal-Mart’s interest in reaching the masses with its online grocery service is an attainable dream.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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