Merchandise sits at the Amazon.com warehouse in Goodyear, Ariz. in a file photo. Wal-Mart Stores Inc. is expanding its online business to try to catch up with e-commerce leader Amazon.RICK SCUTERI/Reuters
Wal-Mart Stores Inc. is ramping up plans to combine its physical stores with online technology, testing the use of lockers to hold goods ordered on the Internet until shoppers pick them up, as the world's largest retailer tries to catch up with e-commerce leader Amazon.com Inc.
While Wal-Mart is the leading retailer overall with $466.1-billion (U.S.) in annual sales, it trails Amazon and a handful of other retailers when it comes to selling goods online.
Amazon had $61-billion in sales last year.
Wal-Mart is on track to surpass $9-billion in annual online sales this year, Neil Ashe, chief executive of its e-commerce unit, said on Tuesday.
Until recently, Wal-Mart has not broken out its online sales, and prefers to look at overall sales and the growing trend of shoppers ordering online and picking up in its thousands of stores.
"We can build e-commerce equivalent to anyone in the world," Mr. Ashe said. Mixing the company's expanding online capabilities with its knowledge from running stores for 50 years "creates a commerce experience that no one else can do."
One way the company is blending its massive retail footprint with the faster-growing online marketplace will be to test the use of lockers. Starting this summer, it will put lockers in about a dozen U.S. stores to hold goods ordered online until shoppers pick them up, Mr. Ashe said.
The test is one of many steps the retailer is taking to link its growing e-commerce business with its thousands of stores around the world, Mr. Ashe told a group of reporters at the company's e-commerce media day in San Bruno, Calif.
Amazon.com, which has no stores, is installing lockers in brick-and-mortar stores such as Staples Inc. to help customers store and pick up online orders securely.
Wal-Mart hopes its network of physical stores, which number about 4,000 in the United States, will give it an edge as consumers increasingly use smartphones while they shop.
Wal-Mart has been testing the shipping of online orders from a small number of its physical stores for about two years. In 2013, the company plans to expand this program from about 25 stores currently to a total of roughly 50.
This is an effort to compete with Amazon's successful Prime subscription service, which provides free two-day shipping in the United States for $79 a year.
Using stores as fulfilment centres that are closer to customers allows Wal-Mart to offer same-day delivery and next-day delivery of online orders "at very low cost," said Joel Anderson, chief executive of Walmart.com.
"Is it really efficient to use our stores. We've been picking and putting items in boxes for years," he added. "Ship from store is no different. We are picking items from the shelves and putting them in a box."
Two-thirds of the U.S. population live within eight kilometres of a Wal-Mart store.
Wal-Mart is also competing against Amazon by increasing the number of products it has available for sale on its website.
Product assortment on Walmart.com grew 35 per cent to 40 per cent to two million items in 2012 and the company plans to double that this year, Kelly Thompson, a Wal-Mart merchandising executive said.
Wal-Mart, which hosted a small group of reporters at its e-commerce headquarters south of San Francisco, faced some criticism in social media as part of the event.
The retailer asked reporters who were tweeting comments on Tuesday to use the hashtag #WMTinnovate. Along with tweets from the reporters, #WMTinnovate tweets were being sent from groups and individuals speaking out against the retailer.
For example, the union-backed group Making Change at Walmart posted on Twitter: "@WalmartNewsroom Why don't you start by empowering the women in your stores with equal pay for equal work? #equality #wmtinnovate."