Dive Brief:

• Walmart recently submitted plans to open a grocery pickup-only store at a former supermarket site outside Chicago. The standalone facility will be called Walmart Pickup, according to the Chicago Tribune, and is expected to be the company’s largest pickup-only site.  
• The plans call for 41,700 square feet of inventory space, with signs directing driving customers through the lot to a canopied pickup bay. There, customers will park in designated spaces while their groceries are loaded into their cars. 
• Walmart predicts the number of pickup trips at this facility, which includes 24 stalls, will be about 180 per hour, or 1,960 daily, according to Supermarket News. Home grocery deliveries will also be made from the site, with 30 estimated deliveries a day. The company expects 30 to 40 employees to run the facility, which has an anticipated opening date of spring 2019.

Dive Insight:

Walmart already offers pickup in about 30 Chicago-area stores, but this standalone, drive-up concept marks a different approach. The company has been testing standalone pickup facilities near its Bentonville, Arkansas, headquarters and in Metairie, Louisiana, and has clearly seen positive enough results to expand the concept to a major metropolitan market.

This proposal comes on the heels of Walmart’s delivery launch in Chicago in May in an effort to win share in the intensely competitive city. Other local chains, such as Jewel-Osco, Mariano’s, Aldi and Meijer, already offer some form of mobile ordering, pickup or delivery, but as Walmart spokeswoman Ann Hatfield said, the proposed pickup facility gives customers "yet another location close to where they live or close to where they work where they can go online, order their groceries and pick it up at this location. They don’t have to get out of their car." 

In other words, Walmart is going all in on convenience. The retailer is seeking approval with the Lincolnwood Plan Commission to operate the pickup facility from 4 a.m. to midnight. Walmart also currently testing automated pickup kiosks, driverless vehicles and a crowdsourcing-based service that enables drivers to use their own vehicles to provide last-mile grocery delivery. A pickup-only location can also help the company avoid the dreaded out-of-stock risks that come with offering the service at a traditional store. This has become more of an issue as e-commerce continues to grow, and companies have had to shift their fulfillment strategies to keep up with demand and avoid compromising consumers’ in-store experiences.  

All of these initiatives, coupled with Walmart’s goal to expand delivery services to 100 cities (covering 40% of U.S. households) by the end of the year, and pickup to 430 markets (69% of U.S. households) by the end of January, indicate that Walmart is quickly morphing into an omnichannel company, allowing shoppers to get their groceries however, wherever and whenever they want. 

The approach has paid off for the company so far, according to a recent report by Packaged Facts. Among click-and-collect consumers, about 42% identified Walmart as the pickup location for their last order — three times the amount that cited Target, which came in second. With such a major competitive advantage in the click-and-collect space, Walmart is wise to continue exploring the concept, particularly in a busy market like Chicago.