Walmart, Target and Other Retailers Push Innovation in 2020

E-commerce has been the key to survival for retailers of all sizes in 2020. For big-box stores, innovation in this arena—which was already well underway for many—has been accelerated, with stores such as Walmart, Target, and Best Buy launching a number of consumer-facing online retail solutions aimed at continuing to engage customers during the pandemic, while alleviating pain points that may have accompanied the quick pivot towards online-only buying.

These innovations were as fast and frequent as they were varied, as stores experimented with strategic partnerships, rolled out at-home learning options, and launched in-store reservation systems, among other things. But while there was great diversity in innovation from big-box stores this year, each new launch was united by a common goal: ensuring continued customer safety and engagement in an unprecedented retail climate.

Target Launches In-Store Reservation System

• As Target prepared for the holiday shopping season, the major chain has launched a new reservation system for shoppers to save their spot in line at physical store locations.
• After a year of massive digital growth, the popular retailer added nearly 8,000 parking spots for easy curbside pickup and hired 130,000 seasonal workers to handle online order fulfillment throughout the holiday season.
• Since the onset of the pandemic, Target’s online orders have grown by 195% and curbside pickup has grown by 700%.

In an effort to streamline holiday shopping in a post-pandemic world, Target set up an online reservation system for in-store shoppers to save their spot in line. Said Target CEO Brian Cornell at the time: “Our teams have continued to innovate and iterate to make sure that Target is the safest place to shop as we go into the holiday season.”

Target introduced a number of new measures in 2020 to make in-store shopping as safe and easy as possible for customers, including contactless payment with the Target mobile app, and mobile checkout devices throughout the store so customers can skip the line. The popular retailer also enhanced its digital-first same-day services: Given that Target’s curbside pickup service grew 700% this year, the company added nearly 8,000 additional parking spots for easy curbside pickup. Target’s online growth in 2020 was massive, with digital sales spiking 195%.

Target Adds 10 Million Digital Customers in Six Months

• The U.S. retailer blew past forecasts, reporting Q2 profits of $1.7 billion, an 80.3% year-over-year increase.
• The jump was led by a huge increase in e-commerce as comparable digital sales grew by 195%.
• Target also reported 10 million new digital customers in the first half of 2020.
• Sales fulfilled by Shipt, the courier system owned by Target, grew by more than 350% year-over-year, while curbside pick-up sales grew 700%.

U.S. retail giant Target blew past industry forecasts with its Q2 report in August, posting profits of $1.7 billion, an 80.3% spike from the same time last year. The effects of the COVID-19 pandemic on consumer shopping habits were apparent in Target’s Q2 earnings report. The company reported strong digital growth, with 10 million new digital customers shopping with Target in the first half of 2020. Sales fulfilled by Shipt, the delivery company that Target purchased in 2017 for $550 million, grew by 350% year-over-year; Drive Up, Target’s curbside pickup system, saw growth of a whopping 700% compared to Q2 of 2019.

CEO Brian Cornell said at the time that the key to the company’s success was a focus “on being agile and flexible and adjusting to the current operating environment, adding that the company was “changing the playbook every week.”

Walmart Moves Toward Next-Gen Fulfillment With New Test Stores

• Walmart turned four of its stores into e-commerce labs to test new ways of using its massive physical footprint to better handle upticks in online shopping.
• Employees will use digital tools and new store design features to learn more efficient ways of restocking shelves and fulfilling online orders.
• The four areas the new stores will focus on improving include omni-assortment, first-time pick rate, checkout experience, and inventory speed.
• Results were already improving as of October 2020—first-time pick rates (the percentage in which an employee successfully finds an item for online orders on the first try) have already improved 20% with these new test centers.
• This is Walmart’s latest push towards merging its online and physical shopping—earlier this year, the retailer combined its online and physical buying teams.

Walmart announced plans to transform four of its brick-and-mortar locations into test centers that will study new ways that allow the retailer to better handle recent surges in online sales. In October, when the retailer announced these plans, two stores were already up and running, both located near Walmart’s headquarters in Bentonville, Arkansas; the locations of the other two still have not been revealed. These stores remain open to the public as Walmart continues to try and walk the line between online fulfillment and in-store experience.

With the stores, Walmart plans to identify four key areas: omni-assortment, inventory speed, first-time pick rate, and checkout experience. These new updates to stores represent Walmart’s best shot at turning its stores into fulfillment centers. “In this new era of retail, assets that used to serve a single purpose will transform into flexible, scalable assets that can be used in multiple ways to serve customers.” John Crecelius, senior vice president of associate product and next-generation stores, Walmart, said at the time.

Walmart Debuts its Subscription Service Walmart+

• Walmart launched its membership program, Walmart+, on September 15.
• For $98 per year, following a 15-day free trial, members will receive access to exclusive perks such as free delivery and fuel discounts
• Walmart+ was first unveiled nearly six months prior and will serve as a competitor to Amazon’s Prime service.

For $98 per year, Walmart+—the company’s new membership program—offers perks such as unlimited free delivery on groceries and other Walmart items, fuel discounts, access to a new Scan & Go checkout service, and more. Promising over 160,000 items available for same-day delivery, Walmart+ will match Walmart’s existing Delivery Unlimited program and transfer existing members to the new service.

Comparisons to Amazon Prime come naturally, but at the time of launch, Walmart insisted it was not launching Walmart+ to compete. with the e-comm giant. “Of course, I hope that brings in more customers and makes them more loyal,” chief customer officer Janey Whiteside said. “But when you’re as big as Walmart is—and serving as many people as we are — this is about really doubling down with the customers that we have and getting more share of wallet and more share of mind.”

Walmart Partners With Shopify to Expand Third-Party Marketplace

• Shopify became Walmart’s first-ever commerce platform partner.
• The partnership allows Shopify merchants to sell their products via Walmart.com, the second-most-popular e-commerce platform in the U.S., only Amazon.
• More than 1,200 Shopify merchants were expected to join Walmart.com by the end of the year.

Starting June 15, Shopify’s U.S. merchants were able to apply to list their items on Walmart.com’s online catalog. Once approved, merchants will be able to bulk edit their product listings, which will automatically sync across Shopify and Walmart’s platforms, at no additional cost. “By partnering with Walmart, we will be able to connect merchants with consumers across America within a trusted marketplace, helping merchants drive new sales while consumers discover new products they’ll love,” Satish Kanwar, VP of product at Shopify wrote in a blog post announcing the partnership.

Walmart has been gradually building up its digital capabilities, handily positioning itself as a major competitor against online retail giants such as Amazon—and this latest partnership was just the most recent step in the company’s strong digital strategy. Currently, sales on Amazon account for nearly 40% of all online retail in the U.S., with Walmart in second place at roughly 5%.

Home Depot Expands Digital At-Home Learning Options

• A new video learning series, Virtual Field Trips, will be added to Home Depot’s existing suite of DIY video content.
• The series, aimed at school-aged children, will provide behind-the-scenes tours showing how products are designed and built.
• The first episodes, which provide a tour of the greenhouses at Niagara-based Bonnie Plants, are now live.

Virtual Field Trips provide behind-the-scenes looks at how some of Home Depot’s product offerings come to life. The series’ first episodes, for instance, take viewers on a tour of Bonnie Plants, a Niagara-on-the-Lake greenhouse that provides Home Depot with vegetable plants and seeds. Virtual Field Trips is not the first effort on the part of Home Depot to engage a younger audience online: the retailer partnered with Discovery Education in 2017 to launch its Science Fair Central platform, which offers classroom activity and at-home workshop ideas for teachers and parents.

The launch of Virtual Field Trips represented an effort on the part of Home Depot to help “parents search for new ways to teach and entertain at home,” Lisa DeStefano, vice president of brand marketing and creative for The Home Depot, said in a statement at the time.

Best Buy, Accenture Announce Innovation Partnership

• Accenture and Best Buy signed a five-year deal to advance the consumer electronics company’s technology goals.
• The deal will focus on three areas of improvement: building and growing diverse talent; investing in growth and learning, and investing in new tech.
• Best Buy’s “Total Retail” overhaul, implemented in 2019, has seen the company turn its focus towards improving its digital consumer-facing experience.

Best Buy and Accenture announced plans to work together to advance Best Buy’s data science capacities, information security, product development, technology risk management, and user experience design. In addition, Accenture will help Best Buy hire new employees for its digital and technology team, and has committed to hiring a diverse roster of talent. Best Buy and Accenture’s partnership will focus on three areas of improvement for Best Buy: building and growing a diverse talent team, increasing investments in technology innovation, and seeking out investment opportunities in learning and development programs.

Brian Tilzer, Best Buy’s chief digital and technology officer, summarized the partnership’s main goal as being creating “the best possible experience for our customers and our employees who serve them directly, and this collaboration will help drive that important work forward.”

Lowe’s Launches Video Chat Tool for Virtual Repair Consultations

• Lowe’s launched a new tool that allows home repair professionals to provide virtual consultations with consumers.
• The home repair retailer teamed up with Streem to launch Lowe’s for Pros Jobsight, an augmented video chat service for plumbers, contractors, and other professionals.
• The program allows professionals to livestream with consumers and offer direct guides into home repairs during the ongoing pandemic.
• There is no download required: The chat program, which features AR tech, opens directly from a mobile browser.

In June, Lowe’s released the first step in a $25 million commitment to support small businesses amid the COVID-19 pandemic. The home improvement retailer launched a new tool, Lowe’s for Pros JobSight, to support repair professionals currently struggling, as well as homeowners who are reluctant to have strangers in their homes. The new video chat service allows homeowners to chat with home improvement professionals via a livestream. 

To use the service, a contractor sends a client a text message with a link to the video chat, which opens in a mobile browser. The home repair pro can use an on-screen laser pointer and AR quick-draw tools to guide a customer through a virtual consultation. After the session, the pros can then review and share a one-page summary. “Our goal with this customer is to keep them working,” Fred Stokes, senior vice president of Pro Sales and Services for Lowe’s said in a statement at the time. “If you keep them working, then it keeps them in your stores. It keeps the trips up, the spend up.”