Wal-Mart Promotes Online Grocery Shopping With a Physical Store
By Jackson Lewis on May 10, 2017BENTONVILLE, Ark. -- Wal-Mart’s online retailer partner, Jet.com, took a decidedly brick-and-mortar turn this week, selling a small selection of its products that focus on fresh food in a New York City boutique for the next six weeks.
This is the first time Jet.com’s products have been sold in a physical location. The shop was erected inside Story, a retail shop that changes its products, decor and events every month or so. Story will temporarily refer to itself as Fresh Story to reflect its current Jet.com-based theme.
Bentonville, Ark.-based Wal-Mart bought Jet.com last year for $3 billion in what was reportedly a bid to more effectively compete with online retailer Amazon. The deal brought Jet.com founder Marc Lore onto the Wal-Mart team as the CEO of Wal-Mart e-commerce.
Fresh Story's opening raises a lot of questions: Why open a temporary location? Why the focus on fresh food? How does this shop reflect Wal-Mart’s efforts to outdo Amazon?
Here's a look inside the store and what it might mean in Wal-Mart's growing battle with Amazon ...
A look inside
The Jet.com store is 2,000 square feet, and the floor is decked out with artificial turf and faux-stone walkways, giving the shop the appearance of a backyard.
Every item in the temporary shop is related to food in some way, so even the products that aren’t edible—including the socks patterned with watermelon seeds and banana sandals—reflect the food theme. There’s even cherry scratch-and-sniff wallpaper on a few walls.
In addition to the themed decor, Fresh Story also plans to host more than a dozen events, including a talk with celebrity chef Mario Batali and a visit from beauty expert Bobbi Brown. Planned events also include culinary workshops for kids and happy hours with live DJs.
The products range from technologically advanced to just plain kitschy. On one display, customers can find the June Intelligent Oven, a device with a $1,500 price tag that uses artificial intelligence to optimize cooking. On another shelf, customers can grab a green pen with a stalk of grass poking out of it for $5.
An e-commerce play
Wal-Mart’s tech ambitions are hiding just beneath the surface of Fresh Story, both literally and figuratively.
Literally because the artificial grass in the shop is sitting on top of heat sensors that track customer movements. Rachel Shechtman, Story’s founder, said that the staff may rearrange the displays if they find that certain areas of the store aren’t getting enough attention.
Figuratively because Sumaiya Balbale, Jet’s vice president of marketing, told Business Insider that the store is meant to raise awareness around Jet’s grocery delivery service. "More and more folks are used to shopping for their everyday essentials and groceries, but by focusing on that, 'Yes, you can buy your Tropicana but also your specialty cheeses through Jet,' it will hopefully showcase that we have a breadth of interesting things that you would otherwise not think of," Balbale said.
There’s even a wall installation of Jet.com boxes in the shop, as if to say, “See all of this fresh food? This could all be delivered straight to your door in one of these boxes.”
That rivalry with Amazon
Using a brick-and-mortar location to promote an online service may seem odd, but it’s similar to what Amazon is doing with Amazon Books, Amazon Go and Amazon Fresh Pickup. The sales from Amazon’s physical locations are no doubt a tiny drop in the bucket compared to its online revenue. What matters, at least for now, is the publicity and buzz those locations generate.
That said, it’s interesting that Wal-Mart opted to open this store in a third-party boutique instead of a Wal-Mart location. It appears that the retail giant is making a conscious effort to give the Jet brand its own identity, separate from the Wal-Mart brand.
Whatever the implications are for Fresh Story, it’s clear that Wal-Mart wants to be a leader in tech-focused retail innovation. "Retail is rapidly evolving," Balbale said. "Tech is changing a lot of the ways in which people shop and the way that retailers can fulfill on those behaviors. It's an exciting time to experiment. I don't think shopping behaviors are set in stone, and there's a lot of opportunity to help shape them."