Sales Synthesis: Wal-Mart Adopts Web Plan to Bolster In-Store Revenues

Convergence is going to be the driver of sales strategy for the future. And Wal-Mart, as it has so often in the past, is leading the way. The world's largest retailer is developing systems that will tie the company's vaunted web presence to its retail stores. While not the first to do this, Wal-Mart's scale and revolutionary logistical system build on its strengths for delivering huge volumes at competition-shattering prices. For those who read this morning's post entitled "Heed the Hype," Wal-Mart represents exactly the sort of strategic alignment of channels, marketing, communications, sales, promotions and finance that, if executed effectively, can optimize the return from all of those investments.

Stephanie Clifford reports on the Wal-Mart plan in the New York Times:

"Now that they have pushed online sales for several years, retailers are trying to figure out how to use online sales to spur in-store sales.

Wal-Mart customers will be able to select items from the retailer's Web site and pick them up at the store within a few hours.

Wal-Mart is the latest in this march, and announced Thursday afternoon that it would introduce a program nationwide called “Pick Up Today” that allows customers to submit orders online and pick up their items a few hours later in their local store. The move is not revolutionary — Sears and Nordstrom, for instance, already have similar programs.

But Wal-Mart, as the world’s biggest retailer, tends to set the bar that all competitors must then hurdle, whether that involves sustainability or free shipping.

Retailers say that tying online and in-store inventory together lets them sell more products to more customers. Nordstrom recently combined its inventory so that if the online stockroom is out of a jacket, a store that has it can ship it to the Web customer. Encouraging customers to retrieve items they have ordered online in a store increases visits to the stores, which usually increases sales. Best Buy offers both store pickup and “ship to store,” where items are shipped free to a local store. Ace Hardware, J.C. Penney and Wal-Mart itself are among the others offering “ship to store” programs.

In Wal-Mart’s program, which is expected to be nationwide by June, customers can select from among 40,000 items online. They will receive a text message or e-mail alerting them when the order is ready, which usually takes about four hours.

“Not only do we see it as a nice convenience for customers, but we also saw it as a way to drive incremental traffic to the stores, and incremental sales,” said Steve Nave, senior vice president and general manager of Walmart.com.

Wal-Mart has been testing the program since October in about 750 stores, and Mr. Nave said that both traffic and sales in those stores got a “meaningful” lift. Wal-Mart has been trying to get more people in its stores: traffic to Wal-Mart’s stores in this country declined in 2010, and sales at stores open at least a year in the United States. have been declining for seven quarters.

The program will include about 40,000 items like electronics, toys, home décor and sporting goods. As of now, it does not include groceries, though Mr. Nave did not dismiss that possibility.

“We’re not ready to talk today about anything that’s going on in grocery,” he said. “What we’ve tried to do is focus on those categories where customers are most likely to be willing to make the purchase before they touch it or look at it. This is a convenience play, and trying to figure out what are the things that are going to drive more customers into the stores.”

Wal-Mart also announced that it was shortening the time customers would have to wait for ship-to-store items, to four to seven days, from seven to 10 days.