Wall Street Journal
By Miguel Bustillo
Wal-Mart Stores Inc. is taking on competitive threats from Amazon.com Inc. and other big online retailers by testing out home delivery of groceries.
The Bentonville, Ark., retailer launched a new service Saturday in the San Jose, Calif., area called Walmart To Go that allows customers to purchase food, health-and-beauty products, medicine and other basic household goods online and have them delivered to their doorsteps for fees starting at $5.
A number of other retailers, including Amazon and Sears Holdings Corp., are experimenting with similar sales models, which have become common in Europe and are available in some large U.S. cities, but the business is still largely the domain of smaller retailers in the U.S.
Wal-Mart said the home-delivery test was limited to a single market and may not be expanded further, depending on the results. Wal-Mart declined to elaborate.
But the world's largest retailer, which already operates a successful home grocery delivery business in the U.K. through its Asda chain, appears serious about the potential of leveraging a blend of store and Web retailing to provide services pure online competitors cannot.
It transferred a U.K. executive instrumental in the Asda Direct service to the U.S., and last week purchased the social media start-up Kosmix to create a new division called @Walmartlabs that aims to tap into the emerging world of using online social media to sell products.
Wal-Mart didn't disclose the terms of the Kosmix purchase, but the website All Things Digital reported that it had paid roughly $300 million, an amount that surprised some observers in the retail and technology industries. They suggested that it signaled Wal-Mart's urgency to grab a bigger piece of the online sales pie.
The founders of Kosmix, who will work for Wal-Mart, had sold an earlier start-up to Amazon for a reported $250 million.
All Things Digital is owned by News Corp., which also owns The Wall Street Journal.
Walmart.com has added a section on Walmart To Go that allowed customers to see if they were eligible for delivery service based on their ZIP Codes, and offered a voucher for a free trial.
Among the limited selection of products for sale were Tyson grilled chicken breast strips, Horizon organic milk, large golden apples and Sara Lee whole wheat bread.
