Online fulfillment choices ‘Pick Up’

The seminal digital event that occurred in the year 2007 was the introduction of the first iPhone, but there was another noteworthy development that year involving Walmart e-commerce.

A few months after the iPhone made headlines, Walmart rolled out its buy online, pick up in store service branded as Site to Store and helped give meaning to the word omnichannel. In digital terms, 2007 was eons ago.

Apple has since launched numerous variants of the iPhone and competitors caught up, fueling a smartphone boom and the mobile generation. Now Apple is on to the next big thing with the first iteration of the Apple Watch. Likewise, Walmart’s Site to Store service is now a common omnichannel strategy in the retail industry and Walmart has continued to evolve its approach to fulfillment. For example, the fulfillment of e-commerce orders for non-home delivery is now branded as “Pickup,” rather than “Site to Store.”

The capability is heavily promoted inside and outside of several recently opened Neighborhood Market stores in the heart of Silicon Valley. Recent visits to stores at 4080 Stevens Creek Boulevard in San Jose and Mission College Boulevard in nearby Santa Clara reveal Walmart aggressively promoting the Pickup service on multiple surfaces inside and outside of the store and incorporating big name brands into the signage.

The distinction between “Pickup” and “Site to Store” is noteworthy as well as instructive as to how Walmart sees the integration of physical and digital evolving. Notably, Pickup is a broader term that gives Walmart flexibility to offer fulfillment choices at physical locations other than its traditional stores such as lockers, drive through locations and potential third party locations.

Conversely, Site to Store is a limiting term that describes a fulfillment process as opposed to an experience of greater relevance to shoppers. The heightened promotional effort evident at the Silicon Valley stores comes as shoppers expectations regarding fulfilling choice and cost have changed considerably.

For example, when Site to Store was introduced in 2007, two years after Amazon launched its Prime membership program for $79 with the key benefit of free two day shipping, most retailers charged for shipping or if it was free it was slow. Having items sent to a conveniently located Walmart store at no charge was a compelling benefit at the time and for several years thereafter. That’s less the case these days.

Now, shoppers expect free delivery and understand a minimum order threshold must be met, but that threshold has come down over time with many retailers choosing $50 as the magic number. Subscription services have gained popularity as well and exacted a toll on store traffic by eliminating trips that used to be generated by consumables with predictable consumption patterns. Same day, and more recently, one hour delivery are gaining traction as the new normal of online order fulfillment.

Meanwhile, Walmart is playing catch up by introducing a new $50 flat rate unlimited shipping offer designed to undercut Amazon’s Prime membership fee which was increased to $99 last year. However, Amazon isn’t standing still and earlier this year began rolling out its Prime Now service to offer shoppers in urban areas one hour delivery for an additional fee.

In addition, crowdsourced delivery services such as Deliv and Instacart, made possible by the penetration of smartphones, allow for prompt home delivery from retailers with the inventory visibility to execute ship from store. Even traditional carriers such as UPS and FedEx are addressing the pain point that made store pick up an attractive option by given customers great flexibility when shipments are delivered rather than leaving packages unattended.

Pick up in store continues to be a viable option for many shoppers and a cost effective approach for retailers to execute. However, shoppers’ expectations continue to be reset by the proliferation of fast and free fulfillment options.