This week, Walmart announced that it is partnering with AutoInsurance.com, to add car insurance to an already lengthy list of goods and services the massive retailer provides. The company is making a rather aggressive effort to make it your only shopping destination. Ever. The question is, will it be able to convince you to go to that physical destination to buy things.
Earlier last month, the company said it will start offering a money transfer service, which — like most Walmart sales — promises to chop customer fees in half over comparable services elsewhere. The company noted in a press release that "the new low-cost service allows customers to transfer money to and from more than 4,000 Walmart stores nationwide for up to 50 percent less than similar offerings on the market." The announcement delivered a blow to competing cash wiring services, like Moneygram and Western Union, which both saw their stocks tumble on the day of the announcement.
The Associated Press explained at the time that the money-transfer service is explicitly designed to draw customers to its physical locations:
Wal-Mart is aggressively trying to increase foot traffic in its stores after seeing comparable-store sales decline for four consecutive quarters. The Walmart-2-Walmart service may help stem that trend, giving customers just one more reason to spend more time inside Wal-Mart.
While the money-transfer bid seemed to target competitors in the financial services sector, the AutoInsurance.com partnerships appears aimed to win over customers in the online sphere. But it's still relying on foot traffic to get customers to visit the website. In its role as giant marketer, Walmart will advertise the website in its stores, per the New York Times:
Walmart will promote the website in its stores, and receive a monthly fee in return, while AutoInsurance.com will collect commissions when insurance is sold on its site. Customers will also be able to access the site from Walmart.com.
Walmart also said that it would start selling Wild Oats organic products for the same amount as generic, non-organic products . The retailer also doesn't appear to tightening its belt any time soon, according to the AP:
Walmart says that almost anything is possible as it pushes to cement its reputation as a place where shoppers can stop in for grocery staples such as milk and eggs and also cross off a number of other things on their “to-do” lists.
Still, it's not clear that these efforts will make much of a difference for the company. Polls have shown that even Walmart's customers, when shopping online, prefer to use Amazon.com over Walmart.com. The Christian Science Monitor's Elizabeth Harper writes that though Walmart spent $540 million on e-commerce last year, it isn't equipped to take on the likes of Amazon:
Amazon's shipping is currently a lot speedier than Walmart.com's. Rush delivery from Amazon will have most products arrive the next day, whereas rush delivery from Walmart.com can take up to five days (it includes "processing time"), which is longer than many shoppers are willing to wait. Even items for which Walmart offers in-store pickup (which is far from its entire catalog) can take several days to be available. With waits like that, it's no wonder that even Walmart's dedicated in-store shoppers prefer Amazon for online purchases.
For now, however, there are still a handful of consumer goods that Walmart doesn't sell yet. (Airplanes, maybe?) Who knows how much longer that oversight will last?