Walmart and Kroger are rethinking stores as the online grocery battle intensifies (WMT, KR)

Walmart grocery

Walmart and Kroger are rethinking store layouts and functions as they battle for a bigger share of shoppers’ online grocery spending.
Walmart has considered adding an automated fulfillment system to its stores, according to Walmart US CEO Greg Foran. This could entail robots picking grocery orders.
Kroger has considered designating a separate area within its stores for picking online orders “so it doesn’t create a distraction for the brick-and-mortar customer,” Kroger’s chief digital officer Yael Cosset told Business Insider.

Walmart and Kroger are rethinking their brick-and-mortar store strategies in the face of growing competition from Amazon for shoppers’ online grocery spending.

Both Walmart and Kroger fulfill online orders from stores. As the popularity of online grocery grows, store aisles can get hectic with a rush of employees trying to fill those orders.

“We got into this discussion actually on Monday at our office meeting where one of our senior folks was saying, ‘I hate shopping in the store on Sunday trying to get up and down the aisles,'” Walmart US CEO Greg Foran said recently during a UBS conference.

Read more: Walmart US CEO says half his store visits make him ‘grumpy’ — and he’s turning up the heat on managers

Starbucks faced a similar issue two years ago after introducing mobile order and pay, which allows customers to order and pay ahead. It led to excessively long lines in stores, which alienated many customers. The company ultimately addressed the problem by redesigning its stores.

Walmart, which offers online grocery pickup at more than 2,100 stores, is now considering adding automation to its stores that could help with fulfilling orders, Foran said. The company may also place a cap on the number of orders stores can fulfill at once.

“We’re looking at what happens when you start to cap this out and is there some automation that we can put in, which may be built onto the store … that will allow us to not disadvantage our most profitable customer which is the one who drives to the store and does all the work themselves,” he said.

Kroger is ahead of the game in anticipating this point of friction. Last year, the company signed a deal with Ocado to build automated warehouses, called sheds, for filling online grocery orders. The first of the sheds will open within the next two years.

Read more: Kroger is …read more

Source:: Business Insider

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