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Walmart's risky online grocery service
The retail giant is testing a grocery delivery service to fend off online competitors like Amazon. But this is a tricky business. Can Walmart pull it off?
 
Fresh, cheap produce delivered to your door for a $5 fee? That's the offer from Walmart, which is directly challenging online retail businesses like Amazon and Fresh Direct.
Fresh, cheap produce delivered to your door for a $5 fee? That's the offer from Walmart, which is directly challenging online retail businesses like Amazon and Fresh Direct.
Walmart

Walmart, already the nation's biggest grocer, has decided to try home delivery. The retail giant is experimenting in San Jose, Calif., with a new online service called "Walmart To Go," which lets shoppers order fresh food and other supermarket fare on Walmart.com and have it delivered to their doorstep for a $5 fee. While companies such as Amazon, Peapod, Safeway, and Fresh Direct already offer similar services, other chains have failed in their attempts to conquer the online market. Is Walmart wise to give such a risky venture a try?

Yes, this is a smart move: This service could help Walmart sell even more groceries, says Craig Johnson of consulting firm Customer Growth Partners, as quoted by The New York Times, because right now very few customers pop into massive Walmart stores to do their quick shopping. But the company will have to iron out mind-boggling logistical issues to make this work. "These are not simple operations to set up profitably, as Webvan and a host of others have found out over the years."
"Wal-Mart tests service for buying food online"

No, this could backfire: By letting people set up deliveries online, Walmart "risks losing one of its best ways of luring people into its stores," says Douglas McIntyre at DailyFinance. Customers who go to Walmart for groceries often also end up buying shoes, clothes, or other things. This service will let them buy the food they need without have to go into a store in person, and that "will eliminate some of the casual purchases" they would have made.
"Is Walmart's grocery delivery service a bad idea?"

This is not Walmart's only web effort: The retailing giant clearly "recognizes that it cannot rely solely on the power of its brick-and-mortar outlets," says Rocco Pendola at Seeking Alpha. Last year it bought tech company Vudu in a move to challenge Amazon and NetFlix in online video streaming. And it just bought a social-media startup called Kosmix for $300 million to create a new division called @Walmartlabs. The company definitely "appears to be taking on a more eclectic business model."
"Playing the business competition between Wal-Mart, Amazon, Netflix, Google and Apple"

 

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