Walmart, Ford test self-driving delivery vehicles
Walmart’s newest delivery grocery program is about to hit the road — and it doesn’t require a team of drivers to navigate routes.
The discount giant is partnering with Ford Motor and Postmates to test self-driving vehicles to deliver fresh groceries. The test, which is taking place in Florida’s Miami-Dade County, will use Ford driverless cars to delver fresh groceries hand-picked by Walmart’s personal shoppers. Postmates, which is already connected to Ford’s digital platform, will serve as Walmart’s delivery partner. (Walmart initially teamed up with Postmates in April to expand its delivery of online grocery orders.)
“We’re still learning – it’s a pilot – but, we want to make sure we stay on the cutting edge of grocery delivery by exploring what’s new and next,” Tom Ward, senior VP, digital operations, Walmart U.S., said in a blog on Walmart’s website.
The companies will continue to collaborate “over the next couple of months, to understand its operations, identify what goods we can feasibly transport, and pinpoint any issues that may need to be addressed to successfully deliver orders via self-driving vehicles,” Brian Wolf, director, business development, Ford Autonomous Vehicles, said in a blog on the company’s website.
Walmart already offers grocery delivery in nearly 100 metro areas. To expand the future of delivery, both Walmart and Ford agree that autonomous vehicles have an important role. Before self-driving cars can go mainstream however, “we must get a better sense of how people want to interact with them,” Ward added. “Together, we will gather crucial data to learn the best way to bring items to customers.”
Walmart is off to a good start when it comes to gathering data on driverless services. Through a partnership with Waymo, Google’s self-driving car project, Walmart uses Waymo vehicles to transport customers to and from a local store to pick up their groceries. The pilot, which is conducted out of one Walmart store in Chandler, Arizona, is being tested among a group of Waymo’s 400 daily users.
The program also takes a swing at other retailers who are dabbling in driverless deliveries. For example, The Kroger Co. launched its self-driving grocery delivery pilot in August at a Fry’s Food location in Scottsdale, Arizona.
Meanwhile, self-driving car startup AutoX has its own grocery delivery and mobile store pilot in San Jose, California. Through a partnership with fresh produce e-commerce company GrubMarket.com, AutoX will enable consumers to order and receive fresh produce and other goods that will be delivered by self-driving cars.
Physical stores continue to be key for holiday shoppers
Over half of shoppers will utilize physical retailers for the majority of their holiday shopping this year.
Retailers with a physical presence will see a 57.3% share when it comes to where consumers plan to complete the majority of their purchases – either shopping directly in-store (31.7%), buying online and then picking up their purchase in the store (15.2%), or buying directly from the retailer’s website (10.4%), according to a new survey from JLL Retail. The two most popular categories for physical retailers are discount stores (26.8% of shoppers) and department stores (21.1% of shoppers).
“This year shoppers are visiting both digital and physical outlets, which reflects the continued merging of shopping channels that has been happening in retail over the past few years,” said Greg Maloney, CEO of JLL Retail. “The role of the retail store and shopping center will continue to transform from a transactional only model to an immersive and experiential one. While statistical modeling suggests an increase of up to 5%, I believe we are in uncharted territories from a consumer strength perspective and, as such, believe we could see holiday sales push upwards of 6% this year.”
As the multichannel shopping experience continues to grow, industrial real estate also plays a big role as both digital and physical retailers look to reduce costs by keeping inventory in one central warehouse location.
“Industrial real estate is at a premium with both e-commerce and clicks-to-bricks retailers relying on warehouse space as retail channels continue to blend, especially in and near urban cores where traditional warehouses and distribution centers are few and far between,” said Matt Powers, executive VP of JLL’s Retail/e-commerce distribution practice. “To account for these densely populated markets and growing multichannel demand, companies need to consider innovative solutions to last mile delivery that reshape the conventional logistics landscape.”
In other key findings from the report:
• Department and discount stores are popular choices among female shoppers this holiday season (22.9% and 13.1% respectively). But the most surprising statistic is that 33.3% of young Millennial women indicated that they would be doing most of their holiday shopping at a department store, while Boomer women (17.4%) will visit discount stores this holiday season. Comparatively, men will be visiting electronics (8.8% to 3.1%) and jewelry stores (2.5% to 0.6%) more than women this holiday season.
• The biggest jump in habits this year will be consumers desire to shop via their mobile devices, with just over half (50.3%) indicating they will make at least one purchase from their phones. This is a huge increase over last year when only 22.2% indicated they would do so.
• Men plan on spending more money than women, with 30.6% of men saying they will spend more than $750 while only 26% women indicated they would do the same. Comparatively, women (44.4%) indicated that they would have more moderate budgets, in the $250 to $750 range, compared to men (36.8%) with a similar budget. And 44.4% in said they plan to spend over $500 on holiday gifts.
• Shoppers plan to use their mobile device to look for deals and discounts (39.1%), product reviews (34.5%), get inspiration for gifts (30.0%), and check physical store inventory (21.9%) before heading to the store. Gen X shoppers are more likely to use their phones to make online orders compared to other age groups. Boomers are the most likely to check product reviews on their phones prior to purchase.
• Thirty-four percent of consumers said they plan on starting their shopping before Thanksgiving this year, while another 28.6% of shoppers plan to do their shopping over Thanksgiving weekend. Fewer shoppers, 16.9% down from 18.3% in 2017 are waiting until just two weeks before Christmas to start their shopping.
To read the full report, visit link.jll.com/Holiday2018.
Experience, services in e-commerce crucial to shoppers needs
Consumers are more apt not to go through with an e-commerce purchase if the retailer fails to provide experiences and services.
This was according to the “Consumer Propensity Study” from SAP, which revealed that seven out of 10 consumers in the United States miss some of the experiences retailers with a physical presence provide, such as fitting rooms.
This is only one area where online retailers fall short. For example, 62% of consumers most frequently abandon their online shopping carts due to shipping costs. Specifically, 58% will not complete a purchase if the shipping rate is too high. Meanwhile, 40% of customers use e-commerce sites to comparison shop with other brands and sites. Thirty percent leave if an item is out of stock.
Suggested selling doesn’t always encourage sales, either. Despite 96% of shoppers recalling seeing suggested recommendations at least half the time, only 17% are interested in this service.
Online shoppers have a wish list that would encourage them not to abandon an online purchase, including easier returns and exchanges (58%), comparison tools (47%), a physical store (36%), and augmented or virtual reality tools to visualize products, as well as chatbots or 24/7 customer inquiry with a Q&A service (24, respectively), the study revealed.
“The survey indicates that shoppers like the convenience of online shopping, but higher than expected shipping costs or a clunky return process quickly changes that sentiment,” said Chris Hauca, head of strategy, SAP Commerce Cloud, SAP. “Retailers should consider how they can eliminate unpleasant surprises to the consumer. To ensure experiences are positive and last beyond the purchase, brands need to connect customer-facing processes with the back-end supply chain.”