"Dual-line" operation: Target and Walmart's winning strategy during the epidemic

Last year, the craze for curbside pickup or home delivery caused by surging online sales became the preferred operating model for North American platforms, with Walmart and Target being the leaders in this model.

Because Walmart and Target mainly operated offline before the epidemic , and when they switched to online sales during the epidemic, they took advantage of the offline advantages and enriched the logistics channels, so they were able to gain a huge advantage.

Walmart pickup and delivery volumes soar

Walmart's online sales grew 79% in fiscal 2021, which ended Jan. 29. Its fourth-quarter online sales grew 69%, the company reported.

Walmart said its sales of delivery grew by triple digits year-on -year . In the grocery market, Walmart pickup and delivery hit record highs, reflecting customers' continued shift to e-commerce and multi -channel logistics options. It is reported that Walmart now offers online order pickup in about 3,750 stores, while same-day delivery is in about 3,000 stores.

Walmart doubled down on e-commerce and omnichannel delivery in September 2020 when it launched a premium loyalty program called Walmart+, which costs $98 a year or $12.95 a month and offers members free next-day delivery, two-day delivery with no minimum order size, free local delivery on orders of $35 or more, and fuel discounts.

Consumer Intelligence Research Partners LLC CIRP predicts that 13% to 14% of Walmart consumers had joined Walmart+ as of Jan. 30. In the U.S., consumers spend an average of $1,000 per year on the platform .

Omnichannel model drives Target's growth

Target’s e-commerce sales grew 145% in the fiscal year ended Jan. 30. Much of that growth was fueled by its omnichannel model — Target said curbside sales, known as Drive Up, grew 600% year over year , and same-day deliveries through its Shipt delivery arm grew 300% .

Target has seen online order volume grow 70% since 2019. In the fiscal year ended Jan. 30, fulfillment for same-day services grew 232% year over year.

For Target, contactless fulfillment of its stores helped boost online sales. The chain's online sales soared to $16.63 billion for the full year, up $10 billion from 2019 .

As a result, e-commerce now accounts for 18% of Target’s total sales, compared to just 9% in 2019. Target says it makes 95% of its sales through its nearly 1,900 stores.

Consumers appreciate omnichannel experience

According to a survey of 1,052 consumers by foreign media , they found that consumers are satisfied with placing orders online.

Experts say that now that consumers have become accustomed to using omnichannel services, there is no going back to the consumption patterns of 2019 and before once the pandemic is over.

“ Consumers are increasingly demanding these omnichannel options because of the pandemic, and once they try them, they realize how convenient they are and how they make their shopping experience easier and easier, ” Basham said.

Walmart and Target have the advantage of having both offline stores and online channels. Consumers can place orders online and pick up their goods at different offline locations. This greatly provides them with convenience while also avoiding contact between people.

Compared with traditional e-commerce logistics, this can better shorten the delivery time. The problem of packages stranded due to the epidemic will hardly occur to Walmart and Target. This is also one of the advantages that enables them to stand out from a large number of e-commerce companies.

As the epidemic situation gradually improves, many consumers are willing to go out and shop, and the combination of online and offline methods of Walmart and Target is more attractive to consumers, and dual-channel sales can add to their profits.

Target

Walmart

Dual-line operation