Before COVID-19, many retailers believed there was plenty of time and opportunity to catch up to Walmart in the nascent online grocery market. But with the current global health crisis accelerating the adoption of grocery e-commerce at an unprecedented rate, these retailers are now facing a number of unexpected roadblocks. Where other retailers see challenges, Walmart appears to see opportunities, and over the past two months, the company has shown that it is uniquely positioned to emerge as the winner in this new retail environment.

This article will explore several contemporary developments that show Walmart’s e-commerce strengths during the current global pandemic, which should further enforce why every CPG brand needs a dedicated e-commerce strategy for the retail giant.

Trust & Popularity

If you wanted to limit your shopping to one large weekly trip because of a global health pandemic, which retailer would you pick? The resounding answer for most of America would probably be Walmart because of its affordability, close physical proximity, and large selection of everyday essentials. In fact, a recent survey confirmed that Walmart has been the most trusted retailer during the coronavirus pandemic.

When consumers operate within an increasingly complex environment, such as the one brought about by COVID-19, they behave in ways that simplify and control variables. This might provide some explanation as to why Walmart’s grocery app has seen a 460% increase in daily downloads compared to the start of this year. Walmart has done an exceptional job of simplifying the online grocery process for millions of first-time users by providing easy-to-follow educational content. By educating consumers on how to easily adopt new shopping behaviors, Walmart has the ability to create a stickiness that could make online grocery a new habit. That seems to be a good business decision, as COVID-19 has driven up online grocery demand fivefold, with Walmart being the most popular choice among new online grocery shoppers.

Online Grocery Accessibility

Online grocery has gotten a reputation for only being affordably available for mostly affluent consumer segments. While affordability is up for debate depending on how you value your time savings, there is no debating that the availability of online grocery services is not universal across all American families. The root of the problem lies in the U.S. Department of Agriculture (USDA), which operates the Supplemental Nutrition Assistance Program (SNAP). SNAP was quite frankly a bit behind the times in regards to online payments, which by default created a massive hurdle for using grocery e-commerce.

Seeing an increase in underserved but interested SNAP-paying shoppers, Walmart vowed to create more inclusive online grocery services. In 2017, the company developed a workaround that allows SNAP shoppers to order groceries online and pay with their EBT cards when they pick them up at the store. Originally piloted in just five stores, this payment option is now available at all 3,300 grocery pickup locations.

While this workaround made grocery pickup available for more Walmart customers, it didn’t create a truly inclusive experience, as SNAP shoppers were still unable to pay for orders online or have them delivered to their homes. That changed, however, in mid-April, when Walmart rolled out online SNAP payments in select states as part of a pilot program with the USDA. Walmart customers in 20 states can now use EBT cards to pay for groceries online and either pick them up or have them delivered to their homes. This is especially critical during the current global pandemic when consumers are trying to limit physical contact and avoid busy stores.

Express Delivery

On April 30, Walmart publicly announced a new service called Express Delivery that utilizes its store network to deliver items to customers’ doors in less than two hours. This announcement marks another step in Walmart’s journey to leverage its powerful physical store network for e-commerce growth and profitability. If this omnichannel strategy sounds familiar, it’s because Target has been successfully using hyperlocal fulfillment for over a year. Walmart has a vast network of approximately 5,400 U.S. stores – or 5,400 hyperlocal fulfillment centers, depending on how you look at it. While it will take the company some time to scale Express Delivery to all locations, it is set to offer the service from more than 2,000 locations by the end of May.

Express Delivery is an extremely important e-commerce initiative for Walmart because it solves a key challenge brought about by COVID-19. Customers are fearful to shop in busy retail locations, so in response Walmart has put limits on store traffic. That decision helps customers feel safer, but it also creates chaos in Walmart’s traditional operating model. When a consumer stops into a Walmart or any other physical retailer, they are essentially self-selecting themselves as the default warehouse associate and final-mile logistics solution. Walmart needed to rethink that process, so it replaced these customer activities with a team of personal shoppers and a network of on-demand delivery partners. This will help Walmart locations potentially backfill missed in-store revenue opportunities and turn store-level inventory by exchanging them for e-commerce orders.

Shorter Advanced Ordering Windows

There have been numerous OneSpace articles in which I’ve discussed how click-and-collect is a huge strength of Walmart, so I won’t repeat myself in fear of sounding like a broken record. I would be underselling Walmart’s ability to listen to the market, though, if I didn’t mention a simple yet effective adjustment to its Grocery Pickup service. As new online grocery shoppers flooded providers, it became apparent that existing scheduling procedures were not adequate for the current levels of demand. In response, Walmart temporarily shortened its advance ordering window from one week to two or three days. While the shorter window fills up quickly, it helps ensure more items are in stock at the time the pickup order is received, according to Walmart.

Conclusion

When America needed it the most, the most American of all retailers stood up to help the country through one of its most trying times. Walmart’s ability to accelerate its growth with new innovations that reach more customers is a testament to how agile the retailer has become Succeeding in online grocery is not easy, but as the boundaries between physical and online retail continue to blur, Walmart is ready to overcome any challenge.