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Shoppers across Canada—excluding Quebec and the territories—can now order groceries on Walmart’s site and have them delivered that day in “as fast as an hour” by Instacart couriers. The partnership expands on the companies’ pilots, through which they’ve delivered groceries in the Greater Toronto Area and Winnipeg since September 2018. The service costs $7.99 per delivery, or $99 for a yearly Instacart Express membership. (The Logic)

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Talking point: The annual membership and same-day delivery model places Walmart in more direct competition with Amazon’s Prime service. Amazon has funnelled substantial resources into its own same-day delivery service—more than US$800 million in its latest quarter—and membership numbers have consistently grown. Walmart is wading into an increasingly competitive space, however. Loblaw launched grocery delivery with Instacart in 2017. And, Uber reiterated in its earnings call last week that it wants to expand in the grocery-delivery space after launching a pilot in Australia earlier this year. It also said in January it plans to prioritize grocery delivery at its new engineering hub in Toronto. Smaller players are also eyeing grocery delivery: last month, Inabuggy, a Toronto-based grocery-delivery startup, announced a new partnership with specialty grocer Starsky Fine Foods, its 44th retail client in the country.

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The retail giant acquired both companies in 2017, but the two brands are not profitable, according to multiple sources. Walmart has decided to keep Bonobos, the made-to-measure menswear label, but will sell ModCloth this year. It will also hold on to women’s line Eloquii, which is also not profitable. Walmart is projecting its U.S. e-commerce operations to lose more than US$1 billion this year on revenues of US$21 billion, according to sources. Walmart declined to comment. (Recode)

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Talking point: Walmart has spent big to compete with Amazon online. It bought the three fashion brands for around US$450 million combined. It also spent US$3.3 billion to acquire Jet.com, a membership-based e-commerce site, and US$16 billion on a majority stake in Flipkart, the Indian e-commerce marketplace. But while Walmart’s online market share has grown—from 2.6 per cent in 2016 to 4.7 per cent in 2019, according to research firm eMarketer—Amazon’s has expanded faster, from 32 per cent to 38 per cent. And, the fashion brands in particular face increasing competition from independent players. For example, Vancouver-based Indochino added chinos in September 2018, putting it into direct competition with Bonobos in more categories.

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The app lets customers scan items as they shop, bag their own items, then scan the app on exiting the store, at which point their credit card is automatically charged. Walmart plans to roll out the app to three other stores. (Globe and Mail)

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Talking point: Walmart has struggled to get customers to use its app in the past. In 2018, the company dropped a pilot program running in 20 Canadian stores, following customer complaints about the difficulties of weighing their own produce and the effectiveness of the scanner gun. The Toronto pilot is meant to address those concerns. For example, customers are now charged per produce item, not by weight. Loblaw is currently running a pilot in eight Toronto stores with a similar scanning process, although shoppers do need to weigh their own produce. Getting the small details right on this kind of app is tricky. In the U.S., Walmart abandoned a scan app in 2018 after customers complained that it was draining their phones’ batteries. Walmart and Loblaw’s interest comes as Amazon is considering opening 3,000 cashierless grocery stores across the U.S. by the end of 2021.

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The company reported earnings-per-share of US$1.13 in the first quarter of 2019, beating analysts’ estimates of US$1.02. Same-store sales growth in the U.S. was up 3.4 per cent, its 19th consecutive quarterly gain. However, it missed revenue estimates, at US$123.93 billion versus US$125.03 billion. Also on Thursday, Walmart Canada announced the creation of two “pickup towers” in its stores in the Greater Toronto Area (GTA). Meant to ease in-store order pickups, customers scan a barcode into the tower’s system, which then brings the requested items down through an elevator structure. (TechCrunch, Mississauga News)

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Talking point: Walmart’s strong financials derive mostly from its thriving online grocery business, and growth in both home and fashion online sales on its website. It’s been investing heavily in those areas to compete with Amazon’s expansion into e-commerce. In e-groceries, Walmart has an edge over its competitors because its brick-and-mortar stores—including those in the GTA—can be used as pickup sites, meaning goods ordered online don’t come with a markup. Walmart Canada is making a number of investments in its physical stores to streamline that process. In early May, it announced an investment of over $200 million to refurbish 31 stores, including an expansion of the online-order pickup option.

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The retailer will deliver orders worth more than US$35 of popular items—like laundry detergent, toys and electronics by the next day for free. The first markets are Phoenix, Las Vegas and Southern California. Walmart plans to expand to the service to three-quarters of the U.S. population by the end of the year. (Reuters)

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Talking point: Walmart’s move is a swift response to Amazon, which announced one-day shopping for members of its Prime loyalty service in April. Walmart has a cost advantage over its online rival, since its network of stores can act as fulfillment centres for delivery orders; Amazon is spending US$800 million to cut Prime shopping times down from two days. Walmart hasn’t announced any plans for an international rollout of one-day delivery. That’s good news for Instacart, which fulfills Walmart same-day orders in Canada, and for the 200 workers the grocery-delivery service is planning to hire in Toronto.

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At least 300 stores will have machines to scan for out-of-stock products, and 1,500 stores will have “autonomous floor scrubbers.” The retailer will more than double its automatic scanning and sorting conveyor belts to 1,200, and 900 stores will have online-grocery pickup kiosks. The retailer has been testing the robots for more than two years. The company said the machines are more productive and cost-effective than human labour, though it didn’t specify whether any jobs would be cut as a result of the rollout. Walmart Canada did not immediately reply to The Logic’s questions about whether the changes would affect Canada. (Wall Street Journal)

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Talking point: Physical retailers are increasingly turning to automation amid rising labour costs and low employee-retention rates. But Walmart is framing its new robots as co-workers to its existing employees, not competition. Mark Propes, Walmart U.S.’s senior director of central operations, said the move eliminates the need for workers to do tasks they “don’t enjoy doing,” allowing the company to create new jobs in “other things” in the store. Though he didn’t specify what those roles would involve, Walmart has also been hiring thousands to fulfill online grocery orders.

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Click-and-collect grocery shopping will add up to that sum by 2020, when a quarter of U.S. shoppers will have used the format at least once, according to Cowen & Co., an investment bank. Walmart will offer pickup at 3,100 stores by the end of the fiscal year, and it could make up as much as 46 per cent of its sales growth. Amazon has two dedicated collection points in Seattle, and offers the service at Whole Foods Market locations in 22 U.S. cities. Meanwhile, the company will reportedly cut the prices of 500-plus items at Whole Foods this week. (Bloomberg, Wall Street Journal)

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Talking point: Amazon’s convenience-based selling point for customers is cheap and fast delivery, and it’s building out a logistics network to control more of its shipping. But traditional retail chains have an advantage over e-commerce companies in click-and-collect: lots of existing locations for shoppers to pick up their groceries. Canada’s highly concentrated food retail market—Loblaw, Empire and Metro together have a 61 per cent share—might be better suited for pickup than delivery. Loblaw, for example, included free click-and-collect in its new $99 a year loyalty program, but not its Instacart-handled home drop-off option.

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Jeremy King said he will be responsible for Pinterest’s discovery engine, which recommends posts and images to users. King previously led Walmart Labs, where he helped the world’s largest retailer adopt shelf-scanning robots and introduce in-store order pickup. (CNBC)

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Talking point: King’s hiring reflects Pinterest’s growing e-commerce ambitions as it prepares to go public. He grew e-commerce sales by 40 per cent last year, partly through a deal Instacart to offer same-day delivery for groceries. Pinterest already offers a “buy” button through which retailers can sell items, and made nearly US$1 billion from ads last year. Pinterest can help retailers target consumers interested in their products more precisely than competitors, because users indicate what they’re interested in by “pinning” posts. But it faces renewed competition from Instagram, which launched an in-app checkout feature this week.

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Online marketplaces will be banned from selling the products of firms in which they own stakes and won’t be able to offer exclusive sales, starting February 1. (Reuters)

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Talking point:  These new rules target Amazon and Walmart-owned Flipkart in particular. The marketing of both platforms heavily features special discounts on popular products like smartphones, and some of the biggest sellers on Amazon India are companies in which it owns stakes.The rules are designed to address fears from large domestic brick-and-mortar retailers and the owners of India’s many kirana corner shops that foreign giants will drive them out of business. Meanwhile, Foxconn is opening a plant to assemble the iPhone X in the state of Tamil Nadu. The country’s rules require products sold in foreign-owned stores be made from domestically-sourced raw materials.  This manufacturing investment could help Apple’s case.