Walmart Experimenting with its Smaller Formats

Walmart Stores Inc. (Bentonville, Ark.) is using its smaller Neighborhood Market and Walmart Express formats to drive its stepped-up expansion in the U.S.

Speaking before an investors’ conference in Orlando, U.S. ceo Bill Simon said these hybrid formats are helping the retailer create a new kind of “fully tethered retailer,” offering consumers all the possibilities of e-commerce with the convenience of a physical store.

That includes such innovations as grocery delivery, drive-through grocery pickup and storage lockers.

The company’s first “fully tethered” units will come online May 2, 2014, in Denver, followed by San Francisco. Its pick-up grocery service, which has been testing in 11 stores in Denver, has resulted in a 90 percent customer satisfaction level. 

Think of the new strategy as “the digital thinking of physical retail,” Simon told the Raymond James Institutional Investors Conference, according to the website MediaPost.com.

“We are using these formats so shoppers can order groceries and maybe a snow shovel online, then pick it up on their way home, when they are stopping to gas up at Walmart anyway,” he says.

Simon said Walmart Supercenters are still “a powerful beast.” But. he said, Walmart has fallen behind on fill-in shopping trips, as many smaller competitors, including dollar, drug and convenience stores, have proliferated. “Our growth has been interrupted by the rapid growth in these smaller stores.”

Walmart has a roughly 10 percent share of that $415 billion C-store market.