Wal-Mart tests in-store lockers for online orders

[March 27, 2013]  SAN BRUNO, Calif. (AP) -- Wal-Mart Stores Inc. will be testing this summer an option for consumers to be able to order product on its website and then have it kept in a physical locker at the store so they can pick it up without having to wait in line or talk to a store clerk.

The test, which will be conducted in about a dozen stories in an undisclosed market, is part of the world's largest retailer's overall strategy to offer increasingly demanding Web-savvy shoppers the ability to shop any way they want. The company is also expanding its offerings online and improving a new "scan and go" shopping app so customers can immediately download coupons personalized to them.

Officials disclosed the moves Tuesday at a media event at its company's global e-commerce offices in San Bruno, Calif., located in Silicon Valley.

The six-story offices, which house more than 1,000 employees ranging from engineers to merchandisers, includes @WalmartLabs, where many of the shopping innovations are coming from. It was formerly a Web analytics company called Kosmix which the discounter purchased in 2011 and then renamed @WalmartLabs.

The offices are different from the staid, sprawling corporate headquarters in Bentonville, Ark. Clearly, it looks like an Internet startup. On the floor housing employees at @WalmartLabs, some workers are playing pingpong and pool. On another floor, Web analysts watch oversized screens of Walmart.com and Samsclub.com to track any technology problems with the site.

The company conducts so-called "hack days" twice a year where most of the staff are allowed to pursue prototypes of their own liking. At the end of the day, they must show their work.

"We are tenacious about building the best-in-class e-commerce. We're developing a density of talent that understands competition at Internet speed," said Neil Ashe, who joined the discounter as president and CEO of the company's global e-commerce division in January 2012. He had been president of CBS Interactive where he oversaw such online properties as cbs.com and CNET.com.

Wal-Mart used the one-day event to showcase how the discounter is meeting the challenges to fight off online rivals like eBay Inc. and amazon.com, which have been luring shoppers to the Web with their vast offerings of products and low prices. But the discounter is also following its own customers. More than half of its shoppers have smartphones and one third of its online traffic now comes from smartphones. For the holiday shopping season, that percentage figure was up to 40 percent.

Over the past year, Wal-Mart has been launching a number of initiatives that merge its online business with the power of its 4,000 stores. That's all with the purpose of meeting the company's overall mission of "saving people money so they can live better." That includes same-day delivery in five markets, and an app that allows shoppers to scan their purchases with an Apple device while in the aisle and then pay at a self-checkout terminal. In 10 months, it also rebuilt its search engine from scratch, and the improved search tool has resulted in an increase of the number of browsers to buyers on walmart.com by 20 percent.

Wal-Mart doesn't break down its e-commerce sales for the U.S., but officials reiterated Tuesday that it expects global e-commerce sales to hit $9 billion this year. That's still a small fraction of the company's overall sales of $443.8 billion in the latest year ended Jan. 31. But the company is fast expanding its global presence which include nine other countries outside the U.S. It's also making big improvements to its ranking among shoppers. For example, in Brazil, walmart.com is now the most popular retail website in terms of traffic, up from being ranked No. 8 last year. And the company is creating a global platform so that lessons in Brazil can be quickly adopted in other countries.

As for Wal-Mart.com's U.S. business, which sells more than 2 million items -- including products it sells through other retailers like ebags.com -- the company plans to expand the number of items. It didn't disclose by how much.

With the test of the new lockers, Wal-Mart is catering to shoppers who want to be left alone when they buy. Joel Anderson, president and CEO of walmart.com's U.S. division, says that 75 percent of its shoppers want to buy interrupted.

The new tests with lockers work like this: once shoppers buy the product online, they're emailed a password. They then can go to the store to pick up the items that are stored in the locker. Anderson says that lockers will vary in size, and the company is still figuring out where to locate them.

The service is an evolution of another shopping option called "site to store" launched in 2007 where shoppers can order online and then pick up the items at a special counter within two weeks. The company has also been testing an option where shoppers can pick up their purchases they bought online at select FedEx locations.

"The customer is in charge," Anderson. "The customer wants to control their own environment."

[Associated Press; By ANNE D'INNOCENZIO]

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