Wal-Mart's Online Pickup Program A Success

Wal-Mart's (WMT) buy-online-pickup-in-store strategy has reduced customer shipping costs by $5 million while sharply increasing new customer acquisitions and in-store sales the world's largest retailer reported Tuesday.

In announcing that it is extending the program to more than 3,300 stores in the U.S., Wal-Mart released statistics to show the strategy is working.

Wal-Mart's approach is different than the traditional approach at retailers like Target (TGT) and JC Penny (JCP) that use the Web to help move in-store merchandise. Walmart.com promotes "tens of thousands of products" that are not available in stores and ships them free to a local Wal-Mart where customers can pick them up.

Since the launch, about one-third of all Walmart.com sales have been placed through Site-to-Store and "more than half-a-million total units have been shipped through Site-to-Store, saving customers more than $5 million in shipping fees."

Great, but is it growing sales? Wal-Mart said that "more than 50 percent of Site-to-Store orders [came] from new customers who make their first purchase at Walmart.com using the service." The chain also reported a 20 percent increase in the number of Site-to-Store "customers who spend an additional $60 on purchases in the store when picking up their orders." Bingo

Wal-Mart also claimed the $345 billion chain reported a weekly gasoline savings of 1,000 gallons and a monthly box reduction of 20,000 "as a result of transportation and packaging efficiencies."

Increased sales and decreases expenses...very nice indeed..