Your Online Order's Here, at a Walmart, Home Depot Locker

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By Brian Sozzi

Big-box retailers are trying to make online shopping more convenient by installing lockers and gated areas inside their stores for the ordered merchandise.

Walmart (WMT) recently announced an expansion of its "Grab & Go" locker service in Canada to 33 locations from 10, or about 8 percent of its total store base in the country. A person who buys merchandise from Walmart Canada's Web store is emailed when the item is sent to a nearby locker. An access code consisting of six digits is punched into a keypad on a blue and yellow locker bearing the Walmart name, and away the shopper goes.

There is no additional cost to the consumer for the service; it simply replaces a trip to the human-operated service desk to pick up a product that was ordered online.

Walmart reportedly began to test the pickup service in the U.S. last year at some stores in the Washington, D.C., area. The company didn't respond to an inquiry on how many of its 4,987 stores in the U.S. have "Grab & Go" lockers.

Home Depot Has Something Similar

Home Depot (HD) calls the spaces "in-store pickup cages," which are for merchandise that is ordered online and sent for pickup at a store. The merchandise is corralled behind a locked cage.
Once a customer comes to collect his item, a Home Depot employee removes it from the cage and hands it off. According to a Home Depot spokesman, the pickup cages are in 550 of the company's 1,917 U.S. stores. (AMZN) launched lockers in 2011, which originally went onto the sales floors of 7-Eleven, Staples (SPLS) and RadioShack (RSH). The large, yellow and grey lockers with Amazon emblazoned in white ink are no longer in Staples and RadioShack. But they are increasingly popping up in Los Angeles, Philadelphia, San Diego, San Francisco, Delaware, New Jersey and Virginia. Target (TGT) hasn't followed the trend.

Multiple Goals

Walmart and Home Depot hope to accomplish a couple of things with their new in-store pickup options. One is that the pickup alternatives help to reduce customer disappointment arising from slow home delivery times and from theft. Retailers stand to lower their own shipping costs. Another aspect is to give customers ordering items on a mobile device the ability to quickly consume the product. The need to keep tech-savvy, online buyers happy from the start of a purchase to the finish is critical in the retailers maintaining torrid online sales growth rates.

Third-quarter online sales for Home Depot increased 40 percent year-over-year, after rising 50 percent in the year-ago period. "We saw increased traffic to our sites, growth in online conversion and an increase in the number of orders being picked up in the store in the quarter," Home Depot president and CEO Craig Menear said on a Nov. 18 earnings call.

Walmart's U.S. e-commerce business, including store-fulfilled sales, contributed about 0.2 of a percentage point to the division's overall 0.5 percent same-store sales increase in the third quarter. Walmart president and CEO Doug McMillon said, "We are developing the capabilities to save our customers time and give them the choices they want by integrating digital and physical retail in ways that are convenient for what they want at that moment."
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