Wal-Mart uses test-and-learn approach for roll out of new products, services

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NEW YORK — Wal-Mart thought shoppers would like the opportunity to use a smartphone app to scan items they want to buy as they walk through store aisles. In theory, they could speed through self-checkout.

A Wal-mart representative demonstrates the now-discontinued Scan & Go mobile app on a smartphone. Wal-Mart took what it learned from the app to create another service.  FILE/ASSOCIATED PRESS
FILE/ASSOCIATED PRESS
A Wal-mart representative demonstrates the now-discontinued Scan & Go mobile app on a smartphone. Wal-Mart took what it learned from the app to create another service.

But customers couldn’t figure out how to work the “Scan & Go” app during tests in 200 stores, so Wal-Mart nixed it.

Instead of looking at the app as a failure, though, Wal-Mart took what it learned from “Scan & Go” to create another service: A national program that enables shoppers to store electronic receipts.

Traditional retailers increasingly are using the nimbler approach to innovating that Silicon Valley startups are known for. Rather than perfecting a program before rolling it out they’re doing more testing as they go along.

The test-and-learn approach comes as retailers face intense competition for U.S. shoppers. Wal-Mart, for instance, has had sales declines at its established U.S. discount stores for over a year.

“Retailers need to fail often and learn quickly and adapt and then adopt,” said Lori Schafer, the executive adviser at SAS Institute, which creates software for retailers.
Here’s a look at some Wal-Mart tests and what it’s learning from them:

DELIVERY

Details: Wal-Mart is testing same-day delivery of groceries, fresh produce and other products in San Jose and San Francisco in California and Denver. Delivery fees range from $3 to $10. It’s also testing same-day delivery of only general merchandise in Northern Virginia, Philadelphia and Minneapolis. Customers pay $10. In January, Wal-Mart began offering customers the option to order online and pick up their items in stores in Denver.
What happened: Wal-Mart Stores Inc., which is based in Bentonville, Ark., said that same-day delivery has been well received. But in Denver, the pickup option is growing faster than home delivery. It doesn’t have any plans to roll it out nationally yet.

Lessons learned: Ravi Jariwala, a Wal-Mart spokesman, said the retailer is encouraged by the results of the tests. “We’re trying to understand how we can provide convenient options for customers to shop online for groceries,” he said.

SUBSCRIPTION SERVICE

Details: In late 2012, Wal-Mart launched Goodies.co, a mail snack subscription service that lets shoppers taste five to eight different surprise snacks that weren’t sold on the discounter’s shelves for a monthly fee of $7. Wal-Mart then solicited feedback so that it could use the responses to spot food trends.

What happened: Goodies.co closed down a year after it was launched even as the subscription business has been a hot area as companies test shoppers’ appetites to have products delivered on a regular basis. For some services, the exact products remain a mystery until they’re shipped.

Wal-Mart declined to elaborate, but analysts say Wal-Mart customers weren’t interested in paying for surprise items.

Lessons learned: Wal-Mart said it learned how to interact with customers in soliciting feedback on new products and launched an invitation-only review program for the winter holidays to get input on a curated list of products. It’s working on another iteration of product reviews.

3-D PRINTING

DETAILS: Last November, Wal-Mart’s U.K. operation, ASDA, began testing 3-D printing technology that allows shoppers to get 8-inch figurines themselves. The cost: 60 pounds, or $100. The service moved around from various stores, but in June, was officially launched at one in Manchester.

WHAT HAPPENED: ASDA spokesman Russell Craig said the test has been so popular that the retailer is considering rolling it out to other stores. “It’s become the new family portrait,” he said.

Some of Wal-Mart’s Sam’s Club stores also are testing 3-D programs. Last month, at the newly opened Sam’s Clubs in Montgomery, Illinois, and another outside Fort Worth, Tex., 3-D printers scanned shoppers’ faces and then they had resin printouts of their heads placed on action figure-sized bodies of one of three Marvel characters.

LESSONS LEARNED: Wal-Mart says the tests are the beginning of customization. Wal-Mart’s CEO Doug McMillon told shareholders in June that he can imagine a day when the retailer can print small household items or replacement parts in a store or a distribution center.


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