Commerce Weekly: Wal-Mart looks outside the (big) box to battle Amazon

Wal-Mart and Google pursue speedy delivery. Elsewhere, more reasons for retailers to fear smartphones, and mobile may be eBay's best bet.

Wal-Mart wants to crowdsource delivery, while Google chases same-day

On the heels of launching its in-store delivery locker program to compete with Amazon Locker, Wal-Mart has announced it’s toying with the idea of having in-store customers deliver online orders to speed delivery times. Reporting on the news at Reuters, Alistair Barr and Jessica Wohl note that, in essence, Wal-Mart would be experimenting with the growing crowdsourcing trend that works well in so many other areas, so why not for Wal-Mart delivery? They write:

“A plethora of start-ups now help people make money by renting out a spare room, a car, or even a cocktail dress, and Wal-Mart would in effect be inviting people to rent out space in their vehicle and their willingness to deliver packages to others.”

Barr and Wohl mention a few of the “why nots” — numerous legal, regulatory and privacy obstacles — but report that Joel Anderson, chief executive of Walmart.com, believes it to be a viable plan. “This is at the brain-storming stage,” he says, “but it’s possible in a year or two.”

At Bloomberg’s Businessweek, Susan Berfield points to the bigger picture: “Even if the idea never moves past the hypothetical, the fact that Anderson is even talking about it signals how serious a threat Walmart considers Amazon.” Wired’s Laura Heller agrees, noting that though there are “far too many unattractive variables” for this program to become a reality, “it shows the retailer is thinking outside of the box when it comes to competing with its online competition, Amazon.”

In related news, Google confirmed rumors of its Google Shopping Express same-day delivery program. The official announcement notes that the local delivery experiment will run in the San Francisco Bay area and that customers will “be able to shop online, in a single place, from retailers such as Target, Walgreens, Staples, American Eagle and Toys”R”Us/Babies”R”Us — along with locally distinct shops such as San Francisco’s Blue Bottle Coffee, and the Bay Area’s Palo Alto Toy & Sport and Raley’s Nob Hill Foods” and get their ordered goods delivered the same day.

Wired’s Roberto Baldwin notes that “Google’s foray into the delivery field is a bit odd” given its limited retail experience. Time Techland’s Harry McCracken asks not only why Google needs to go down the same-day delivery road, but also whether it’s even worth it:

“This month marks the fifteenth anniversary of the launch of the famously ill-fated Kozmo.com. Ever since, off and on, other companies have been trying to figure out how to do what Komzo couldn’t: make really fast delivery at a really low price into a rational, sustainable, profitable business. I wonder if it’s even possible?”

Wired’s Marcus Wohlsen says Google’s confirmation of the rumored same-day delivery program signals its crystal clear intentions: “Google wants to be Amazon.”

Showrooming is just the beginning of retailers’ smartphone problems

Showrooming, the consumer art of fondling a product in-store only to employ a smartphone to buy it online for a cheaper price, has become a well-known issue for brick-and-mortar retailers. But consumer research psychologist Kit Yarrow reports at Time Business that retailers have more to fear from consumers’ relationships with their smartphones.

Yarrow outlines three main areas of concern she’s observed during her field research. Two areas relate directly to the physical retail shopping experience. San Francisco farmers market customer Brett told Yarrow, “Everyone’s looking down at their phone, blocking passageways, walking right into you sometimes. It’s rude.”

Also notable, she says, is the phone’s ability to come between a trained sales associate and the customer, making it less likely for the retailer to influence a sale. “A study by Accenture found that 73% of shoppers with smartphones would rather consult their devices than a salesperson for looking up information quickly,” Yarrow notes. The phone, she says, is less likely to try to upsell you, and if it does, you can simply turn it off, something you can’t do with a sales associate.

The retail bottom line is suffering from smartphone influence aside from showrooming as well. Yarrow notes that consumers waiting in line are no longer the guaranteed captive audience more likely to succumb to impulse purchases, as they’re more likely to be passing the time playing Angry Birds or checking email. “Single sale copies of magazines, largely purchased while waiting in line at the grocery store, are down 8.2% from last year,” she writes. “Sales of gum have taken a hit, too, declining 5.5% last year.”

eBay is banking on mobile

A recent Artisan survey of 200 retailers shows that mobile is quickly becoming an area of focus: 56% of survey respondents said they would put more resources into their mobile strategies in 2013 than they did in 2012, and 84% expect mobile commerce to grow at a faster rate than online commerce did.

Some retailers are banking on hopes that online commerce will rapidly be replaced by mobile commerce. Marcus Wohlsen reports at Wired that in an address with analysts this week, eBay CEO John Donahoe said that a “commerce revolution” is underway and that mobile is at the forefront. Donahoe told analysts he expects $300 billion to flow through eBay’s platforms and divisions this year, up from $175 billion in 2012. Wohlsen says Donahoe “made clear that he believes a large chunk of that money moving through eBay will come from people buying and paying for stuff with their phones.”

Regarding its major competitor Amazon, Wohlsen says eBay’s focus on mobile might be its leg-up:

“Ultimately the battle between Amazon and eBay is a contest between competing infrastructures: centralized versus decentralized, hierarchical versus distributed. The mobile world would seem better suited to eBay’s sensibility. … Perhaps eBay’s best chance lies beyond U.S. borders. According to [Baird Equity Research analysts], the number of internet users globally is expected to double by 2015 to 4 billion, and many of those users will be mobile only.”

Wohlsen says that as PC use becomes “less and less relevant to online life,” eBay’s position as a mobile option becomes all the more relevant. You can read his full report at Wired.

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