Wal-Mart Stores Inc. will offer 'pickup discounts' to U.S. shoppers on items they order online and pick up in-store, as it revamps its e-commerce offerings at a faster pace to close the gap with larger rival Amazon.com Inc.
Online orders picked up in store already qualify for no shipping charges since the retailer saves on shipping fees. The latest discounts come on top of that. For example, a Vizio 70-inch 4K Ultra HD television priced at $1,698 for store pick up will qualify for an additional discount of $50.
Marc Lore, head of Wal-Mart's e-commerce operations, told Reuters in an interview on Tuesday he expects the move to boost transactions online and improve customer traffic in stores.
"This is a very material change in the value proposition we are offering customers," he said.
Lore said Wal-Mart is able to offer these discounts as it is able to eliminate delivery costs by leveraging its fleet of more than 6,700 trucks to deliver products from warehouses to stores.
The decision to offer these discounts is the latest move by Lore to revamp an existing e-commerce offering from Wal-Mart. The change is expected to improve the retailer's competitive advantage by making its 4,700 U.S. stores more relevant to shoppers in a digital age, analysts said.
Lore has been at the forefront of bold moves Wal-Mart has undertaken to challenge Amazon since he took charge of the retailer's struggling online business in August, after Wal-Mart acquired Jet.com, a company Lore founded, for over $3 billion.
Since then he has acquired three online retailers, shuffled Wal-Mart's e-commerce decks and made two-day shipping free on all online orders over $35, without any membership fees, to compete with Amazon's popular Prime shipping program.
These moves are in line with the broader push by Wal-Mart's Chief Executive Doug McMillon to give the retailer an even more dominant position in U.S. e-commerce.
Wal-Mart has been investing in e-commerce for the past 15 years, but it still lags far behind its Seattle-based rival.
Starting April 19, Wal-Mart will offer pickup discounts on 10,000 items and on more than 1 million products by June.
In a separate blog post, Mark Ibbotson, executive vice president of central operations, said Wal-Mart is expanding its same-day pick up service and is rolling out a pick-up tower – a giant vending machine that delivers packages ordered online when a customer enters a bar code – to more stores.