As it looks to compete better with e-commerce giant Amazon, WalMart is pushing digital initiatives which offer consumer convenience. Recently, the company launched its Scan and Go app for Android users, initially in a testing phase in one store, though likely to be rolled out to more stores later this year. This app is designed to make the checkout process significantly easier for consumers and eliminate the long wait times at check out. Using the app, consumers can scan the items as they place them in their shopping baskets and pay the final amount using the app. They can exit the store by showing the payment receipt on their phones. While this app is already available for iPhone users, by expanding it to Android phones, Walmart can finally target broader consumer base.
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Building A Competitive Edge
Walmart is facing tough competition from e-commerce players, especially Amazon which is using technology to offer consumer conveniences. The latter’s AmazonGo initiative is being touted as a revolutionary shopping concept. AmazonGo stores will allow users to just pick up the items they need from a grocery store and exit. The app will automatically register the purchases and bill the customer’s Amazon account. Walmart’s Scan and Go app still requires the user to manually scan each item, pay the bill using the app and show the receipt at checkout. The company has also been slow in rolling this app out to a wider consumer base, given that the Android version is only now being released, much later than the iPhone app. However, Walmart now appears to be serious about its digital initiatives and is gearing up to battle with Amazon in the grocery segment.
Grocery shopping is a $600 billion market in the U.S. and the main driver of traffic in supermarkets such as Walmart. Morgan Stanley’s research shows that 67% of consumers who have never shopped for groceries online have not done so because they want to select produce themselves. This has prompted players such as Amazon to work on the AmazonGo concept, which allows consumers to pick the produce themselves and at the same time experience the convenience of hassle free online shopping. Walmart needs to ensure that it does not lag behind in such technology initiatives to attract customers to its stores. We believe while the company has been slow in rolling out its scan and go app, it is focusing on digital initiatives to drive revenues over the long term.
Article Published in Forbes on 14th February 2017