Wal-Mart keeps experimenting.
As the world’s largest retailer steps up its e-commerce activities to close the yawning gap with Amazon, it isn’t forgetting about its substantial brick-and-mortar operations that account for the bulk of revenues. The latest trial said to be under development is a pop-up format expected to be unveiled in the first quarter of next year in California, according to sources.
The pop-up is said to be a few hundred square feet in size, oriented toward commodity and grab-and-go products, technology and walmart.com. In a sense, the trial smacks of Amazon’s experiment with small-format food stores, Amazon Go, which remains under development but has hit several major hurdles.
The pop-ups could be flexible enough to be rolled out to a variety of locations, bringing Wal-Mart closer to consumers in urban areas, commuter hubs and possibly malls, many of which are hungry for new retail formats due to store closings.
One source said that for its pop-up, Wal-Mart is collaborating with Barrows Global, a 25-year-old firm with offices around the world that provides a range of services including branding, store design and pop-ups. Barrows has also developed a pop-up format for Samsung as well as food shops in the Canal Street Market in New York, and the Aspen Museum Store, among other clients.
Wal-Mart did not respond to two inquiries seeking comment on whether a pop-up pilot was in the works. A call to an executive at the Barrows office in SoHo in New York was not returned.
Developing pop-ups reflects Wal-Mart’s intent to innovate and get in tune with changing consumer demands for convenience and for compelling shopping experiences. Wal-Mart’s pop-up format, if successful and brought to many locations, could help the retail juggernaut spur growth online, further stepping up its battle with Amazon.
Though pop-ups have proliferated over the last decade, retailers are taking the format more seriously nowadays and developing them with an eye for greater sophistication in merchandising, marketing, design and technology. They also realize that retailing has to be fun again, and less stressful.
Meanwhile, Wal-Mart has been elevating its sales and appeal online through acquisitions. Last year, the mass chain bought Jet.com for $3 billion, and through that deal, inherited home goods retailer Hayneedle that had been owned by Jet.com. This year, Wal-Mart’s acquisition strategy continued with the purchase of Bonobos for $310 million, as well as multichannel outerwear retailer Moosejaw for $51 million, shoe retailer ShoeBuy for $70 million, purchased via the Jet.com subsidiary, and Modcloth, a vintage apparel-inspired retailer.
Still, walmart.com is relatively underdeveloped as a percentage of its total revenues, compared to Amazon and other major retailers.
Wal-Mart has dabbled in pop-up-like formats in the past. It once partnered with Procter & Gamble to turn bus shelters in Toronto into shoppable outposts by enabling consumers to use smart phones to scan QR codes on posters depicting P&G products to buy items and get them shipped home for free. In New York City, Wal-Mart recently had a truck covered in pictures of P&G products with QR codes that consumers could scan for shopping. A few other Wal-Mart pop-ups were strictly to promote walmart.com in malls during holiday times.
In 2011, the big-box chain started thinking small with the introduction of the Wal-Mart Express format, which launched on Chicago’s South Side and rolled out to more than 100 locations. The concept was geared to reach a different, 7-Eleven-type shopper and emphasize convenience food products. But last year Wal-Mart Express was shut down after receiving weak consumer response and as a result of the retailer deciding to focus on other formats.
Also on the innovation front, Wal-Mart operates an innovation lab in India, has more than 1,000 pick-up spots at Wal-Mart stores where customers don’t have to leave their cars to pick up the groceries ordered online, and, in Silicon Valley, the retailer operates Store No. 8, an innovation center for incubating and investing in new ideas for retailing.