Walmart launched a grocery pickup service in 11 Ottawa-area locations this week. For $3, shoppers can order grocery items on the Walmart Canada website and pick them up at a physical store. While the move places Walmart among the pioneers of click-and-collect in Canada, European grocers have been experimenting with the service for more than a decade.
In 2000, French supermarket Auchan pioneered its “Drive” format, where customers can drive to warehouse stores to pick up orders placed in advance. Today, ten of the eleven French grocery retailers profiled in L2’s Insight Report: E.U. Grocery E-Commerce offer the service; Drive stores even outnumber hypermarkets.
The practice hasn’t taken off across all of Europe. In Germany, click-and-collect is available at only three of six major grocery retailers (Edeka, Real and Rewe) and their limited locations are significantly underutilized. The service’s lack of popularity points to the fact that German grocery retailers lag behind in e-commerce despite attempts (such as Rewe’s hiring a former Tesco.com manager as Chief Digital Officer) to become more digitally competitive.
Grocery retailers are increasingly using click-and-collect to sell meat and vegetables in addition to packaged fare. France’s Auchan was one of the first to incorporate fresh produce into a Drive store. Canadian grocery retailer Loblaw found a surprising amount of demand for fresh produce when it debuted its own click-and-collect business in Toronto last year. Like Walmart, Loblaw plans to expand the service in Ottawa amid growing demand.
In the course of expanding its grocery pickup business in Canada, Walmart can look to the experience of U.K. subsidiary ASDA. Click-and-collect has grown rapidly in the U.K., where all six major grocery retailers offer the service. Tesco has led the foray, opening about 200 click-and-collect locations since launching the service in 2011. Marks & Spencer announced this week that it would expand free in-store collection to more than 100 outlets, following a move by competitor John Lewis to charge a £2 fee for each order under £30.
John Lewis has seen demand increase by 32% this year, highlighting a national trend. IMRG, the UK’s online retail industry association, expects 20% annual growth in click-and-collect across all retailers. However, this popularity doesn’t necessarily translate into increased revenue. As John Lewis’s fee imposition indicates, click-and-collect orders can cost more than they earn.