Walmart to offer free pickup service for apparel, general merchandise

Signage at a Walmart store is seen on Tuesday, May 3, 2016. (THE CANADIAN PRESS/Ryan Remiorz)

TORONTO -- Walmart Canada Corp. is rolling out a free pickup service for online orders at all of its Canadian stores by the end of the week.

"All the general merchandise and apparel goods that we used to send by traditional carrier are now going through our trucks going to our stores and now customers can pick up those products for free," the company's vice-president of omnichannel and online grocery Daryl Porter at the eTail Canada conference Thursday in Toronto.

The discount department store has a wider selection of goods online that is not carried in stores, and the pickup service offers customers the option to have those shipped to the store of their choice, Porter said. The service also allows customers to save on delivery fees by grabbing their orders at the nearest store.

"Customers are making so many trips to our stores anyways. It's about unlocking that value for them," Porter said.

It will be handy for customers who avoid home delivery over concerns about unattended packages left on their doorstep, or for people who want to make sure a gift is not accidentally intercepted by the intended recipient, he added.

The new service comes after the company started offering grocery pickup in select markets, beginning with Ottawa in 2015, about a year after Loblaw rolled out a similar program in the Toronto area. Walmart Canada has since expanded it to areas including the Greater Toronto Area, Calgary and Edmonton.

The company cancelled the $2.97 charge for customers who order groceries online and pick them up in stores last August after internal studies suggested it prevented some people from using the service.

Competition in the online pick up and delivery business is heating up as retailers scramble to compete against e-commerce giant Amazon.

Canada's grocers, especially, have doubled down on expanding their e-commerce offerings in response to Amazon's acquisition of Whole Foods Market, including its 13 Canadian locations, last year. The move sparked speculation among industry watchers that the company may be looking to expand its grocery delivery service north of the border.

Walmart, the world's largest retailer, expects 40 per cent growth in online sales this fiscal year, but it remains a distant second to Amazon.

The company said Thursday its online sales rose 33 per cent in the first quarter, a strong showing after a disappointing 23 per cent increase in the final quarter of last year. Wall Street punished the company for the end-of-year online performance, sending company shares plunging more than 10 per cent. It was the biggest single-day percentage drop for shares in 30 years.

Marc Lore, CEO of Walmart's U.S. online business, told reporters on a call Thursday it's seeing 10 per cent to 20 per cent more growth going to its online grocery business.

Walmart is reworking its website with a focus on fashion and home furnishings. The new site also makes it easier for shoppers to see what services are available, such as the ability to order groceries online, and pick them up on the way home. It has also teamed up with Lord & Taylor to create a dedicated space on its site, which will be launched in the next few weeks.

Amazon.com Inc. has leveraged its Prime membership program into intense loyalty from customers. Amazon recently raised its annual fee for membership to $119, from $99. And after spending $14 billion to acquire Whole Foods last summer, Amazon announced two-hour delivery from the grocery chain for its members.

While it fights off rivals at home, Walmart is expanding abroad, concentrating on areas with big growth potential like India and China.

With files from The Associated Press