Already intense, the competition among mass market retailers for the allegiance of omnichannel shoppers is becoming more fierce. Not a week goes by without an announcement from a major retailer about how it intends to improve the customer experience. Although the idea that brick-and-mortar stores are passe and will slowly but surely whither away has been debunked, the primary battleground for the hearts and minds of consumers has shifted to interactions facilitated by digital technology.
Walmart earlier this month began providing free next-day delivery in three metropolitan areas — Southern California, Las Vegas and Phoenix, with the promise of quickly expanding the service to other markets across the country, reaching about 75% of the U.S. population by the end of the year. The program, which includes 220,000 items, enables the world’s largest retailer to keep pace with Amazon, the leader in e-commerce, in terms of delivery speed and convenience.
NextDay delivery from Walmart.com complements the retailer’s other omnichannel capabilities, which Marc Lore, president and chief executive officer of Walmart eCommerce U.S., says by year’s end will include Grocery Pickup at 3,100 stores and same-day grocery delivery from 1,600 outlets. “Customers want shopping to be easy and convenient, including getting the items they order online quickly,” he notes. “Our 4,700 stores, site and app combine to create an incredible range of choices for customers.”
Target is another traditional brick-and-mortar powerhouse that has successfully transformed its business model to compete in an omnichannel environment. The company has repositioned its 1,800 discount stores to double as distribution centers for orders placed digitally. Options include same-day delivery, often within hours, from 1,500 locations via Shipt; Order Pickup, a free service that allows consumers to make purchases online and collect products at a store in one hour; and Drive Up, which enables shoppers to place a digital order, drive up to a store and have an employee bring the completed order to them within two minutes.
Spurred by the program’s popularity, Target has just taken Drive Up to new markets in California, Florida, Georgia, Maryland, Texas and Virginia. More than 1,250 stores now offer the service. “The expansion brings us one step closer to offering Drive Up at most Target stores by the end of the year,” says senior vice president of digital Dawn Block. “It continues to be our fastest and top-rated same-day service, and we can’t wait for more guests to experience the added ease and convenience across the country.”
Amazon, the catalyst for the seismic changes sweeping across retailing, is investing $800 million to cut the guaranteed delivery time for its Prime members from two days to one. The subscription service, which costs $119 a year, includes streaming music and video and other benefits.
In addition, the company continues to develop synergies between Prime Now and Whole Foods Market, the brick-and-mortar supermarket chain it acquired in 2017. At the beginning of May, Amazon expanded grocery delivery from Whole Foods to 13 additional markets, bringing the total number of metropolitan areas where the service is available to 88.
By this stage of the game, the impact of Amazon has been factored into the thinking of every company with aspirations to be a top-tier retailer. But competitive threats aren’t limited to the e-commerce giant and traditional rivals. Other technology-based firms are moving ahead with plans to capture a share of the lucrative consumer packaged goods market. Google is a case in point.
The company made its intention to become a bigger player in the marketing and sale of CPG merchandise with the introduction of a range of new tools at the Google Marketing Live conference in San Francisco earlier this month. The new Google Shopping page enables users to purchase products after comparing options according to criteria that they select. In addition, shoppers will be able to buy items via searches, Google Images and YouTube. The tools promise to give retailers and marketers new avenues to reach and interact with consumers.
And then there’s Alibaba, whose mastery of e-commerce some industry observers think is unequalled anywhere in the world. The Chinese company, which has been taking a hard look at the U.S. market for years, entered into an agreement with Office Depot in March to develop a co-branded business-to-business website designed to give small and medium-size companies access to the global e-commerce market. That surely won’t be the last move in the U.S. by Alibaba, whose stated mission is to make it easy to do business anywhere.
With so many world-class companies in the retail and technology fields focused on making the reality of the omnichannel world live up to the hype, the ultimate beneficiary should be the consumer. In today’s marketplace an advance by one company is quickly matched by one or more rivals, spurring everyone to intensify their search for better ways to meet the needs of customers. The result is a virtuous circle that should take the shopping experience to a new level.