Retail News Update

Offline retailers are increasingly offering a way for consumers to shop online but pick up the goods in stores, allowing them to avoid shipping costs and choose from a wider selection of items than their local stores can stock. Because customers tend to bolster these purchases with others once they get into the store, retailers are profiting handsomely.

Take Wal-Mart, for instance. In recent weeks, the company, the largest retailer, completed a national introduction of its Site to Store service — in which consumers buy items from the Web site, then have the items delivered, at no charge, to their local Wal-Mart stores where they can pick them up. Items arrive within days, though the system is not yet set up to tell customers when something they want is already in stock at a local store.

According to Raul Vazquez, Walmart.com’s chief executive, the initiative has surpassed the company’s expectations, with about a third of all online sales occurring through this program. “It’s gone incredibly well,” Mr. Vazquez said. “None of us expected to see it reach this percentage of sales at this point.”

Multi-channeling like what Wal-Mart is doing allows users to choose from a wide variety of Products which store may not necessarily carry. Also, this reduces the shipping and carrying cost for the retailers. Another side benefit of this, Customers are spending again when they visit the store to pick up the products.

Sixty percent of customers who order on Walmart.com and pick up items in the local store purchase an additional $60 worth of goods at the store, he said.

It is not yet clear whether customers are merely buying goods they would have bought anyway at the stores. However, in eliminating shipping charges, the Site to Store program is erasing a hurdle cited by many consumers who browse, but do not buy, online. Walmart.com’s customers have avoided a total of $10 million in shipping charges through this program since it was introduced this spring.

Such programs also eliminate other hurdles to online buying. Among those consumers who have avoided online purchases, 42 percent said they prefer to see the item before buying. Analysts said that especially for purchases like apparel and furniture, customers who cannot closely inspect an item before purchasing are less willing to buy.