Can Walmart workers deliver better last mile results on their way home from work?

Discussion
Photo: Walmart
Jun 02, 2017
George Anderson

Walmart is putting its store associates to work in a whole new way. The world’s largest retailer is testing a home delivery program that has associates dropping off online orders to customers on their way home after work. The test is being conducted at a store in Arkansas and two others in New Jersey.

Writing on the company’s blog, Marc Lore, president and CEO of Walmart U.S. eCommerce, characterized the test as “a win-win-win for customers, associates and the business.” Packages, he wrote, will get “to their destinations faster and more efficiently” while shipping costs will be cut and associates will pick up additional pay.

“It just makes sense: We already have trucks moving orders from fulfillment centers to stores for pickup. Those same trucks could be used to bring ship-to-home orders to a store close to their final destination where a participating associate can sign up to deliver them to the customer’s house.”

Participation in the home delivery program is voluntary. Walmart associates will use proprietary technology to set preferences for “how many packages they can deliver, the size and weight limits of those packages and which days they’re able to make deliveries after work.” The retailer assigns deliveries to associates in a way that minimizes the distance they collectively need to travel.

With 90 percent of the U.S. population living within 10 miles of a Walmart, Mr. Lore thinks using associates to make deliveries could be “a game changer” for the retailer in its competition for market share.

Critics of Walmart’s labor practices say that there aren’t enough details known to determine if the program is a benefit to associates or a way for the company to exploit workers. Walmart has not offered specifics on what it will pay associates for making deliveries and whether gas and related costs will be factored into compensation.

DISCUSSION QUESTIONS: Do you see Walmart’s use of employees to make deliveries on their way home from work as a potential last mile game changer for the retailer? What do you see as the benefits and potential pitfalls of this program?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"If the employees are aware of the potential positive impact they can have on the whole customer experience then this could work very well for Walmart."
"Having associates deliver packages to Walmart customers on the way home is a creative way for Walmart to distinguish itself in customer service."
"OMG, in the long run, this is a disaster waiting to happen. The downsides are endless."

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37 Comments on "Can Walmart workers deliver better last mile results on their way home from work?"


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Mark Ryski
BrainTrust

I’m not sure if it will ultimately be a game-changer, but full points to Walmart for thinking about the delivery challenge in a completely new way. One of the big benefits is in providing employees an opportunity to earn additional income — essentially “Uberizing” employees’ commute home. Making the program voluntary is an important element of the program since not all employees will want to do this. And if this gets customers their deliveries sooner, that’s great too. Of course there are plenty of ways this could go wrong, but I’m sure Walmart will stress test the idea thoroughly before it gets too far. Overall, I think this is a great example of how innovation doesn’t always need to be just about technology.

Ken Lonyai
BrainTrust

Walmart is not known for the happiest employees. Even with pay, I don’t think too many will openly embrace this idea. If they do, there are umpteen things that can go wrong with this idea that make it sound, to me, like a cheap and desperate move by management. Back to the drawing board guys.

Sterling Hawkins
BrainTrust

The locations and personnel Walmart has can be an incredible resource. Getting the compensation, customer experience, etc. correct will all take some doing though. It’s an idea worth piloting.

Ken Lonyai
BrainTrust

Aside from the pitfalls/liabilities eluded to by me and others, competent delivery is harder than it sounds. For example: we receive packages from a reasonably large online merchant that uses a known “last-mile” type of vendor to save on FedEx costs and there have been serious problems, so now our account is flagged for FedEx delivery only.

After the all the liabilities, what if’s, and training costs, a meaningful net gain is unlikely.

Max Goldberg
Guest

I can see how employee deliveries can help Walmart by reducing costs, but I wonder if the plan will create enough benefits for employees so that they will want to participate. How much will Walmart pay employees and will it reimburse them for mileage and provide insurance while they are conducting this company business?

David Livingston
Guest
3 years 4 months ago

You said it in probably the nicest way possible. I see this as a way of Walmart cost shifting insurance liability and paying employees 50 cents a mile.

Art Suriano
Guest
Not knowing the details of how the associates benefit is important. We don’t know about pay or gas and mileage reimbursement. However putting that aside and assuming the associate compensation will be all right, I like this concept. Think back to the days of when in the ’50s and ’60s. We had the bread man, the milk man, the egg man and much more all making home deliveries. There was more than just a purchase of an item and payment; there was a relationship formed with the customer and the delivery person. I see the same benefit here with many of the store associates delivering items to customers. If they are well trained and engage with the customers they meet, this could be very beneficial for all parties involved. Then take it one step further and think about the add-on sale opportunities right there on the spot when delivering the item. For example, the customer purchases a printer and the associate making the delivery tells the customer that if ordered now, they can save “X”… Read more »
Mel Kleiman
BrainTrust

I am not a lawyer but all I see is a major liability problem for Walmart if one of those employees has an accident on the way to delivering an order. The second question is, how are the workers going to be compensated for time and mileage?

Steve Montgomery
BrainTrust

The concept sounds simple but as with many things the devil is in the details. An employee who is driving home from work is off the clock and no longer being paid by Walmart. However, if they are delivering packages for the company they would be eligible for compensation. If the time delivering the packages bumps them up to the number of hours to be considered full-time they would be eligible for the benefits that come with that status. If the delivery time took them over 40 hours, overtime would have to be paid. As an employee on the clock is Walmart still legally responsible for their actions?

Some other details would be: does the driver get paid mileage, who is responsible if they have an accident and what happens if the packages get damaged, stolen or lost in transit?

Bob Phibbs
BrainTrust

This seems like anything but progress for retail associates. Nordstrom used to encourage employees to deliver things on their way home. The practice stopped due to accidents and things going wrong — who paid? I would think this would be the same thing.

Ron Margulis
BrainTrust

This sort of flows from my frequently related opinion about the demise and potential return of the milk man (see several past comments).

There are many benefits including shopper engagement, upselling potential and employee appreciation. Plus there’s no worry about the FAA regulating your drones.

Timing will be the biggest issue — Walmart has some pretty unusual schedules for its associates, most aren’t leaving work at the same time each day. I suppose they can coordinate the outbound deliveries with the time and attendance system to address this. Payment for delivery and benefits/insurance could also be an issue. And don’t forget safety and loss prevention.

Also, one wonders if the employees will be picking up returns on their way to work.

Charles Dimov
Guest

Game changer — no. Innovative? Definitely. Kudos to Walmart for looking at ways to improve and strengthen their service offering while improving their margins. Presuming they will pay their employees a benefit for doing this last mile delivery, it is another great way to tap into their own resources to drive the holistic benefits of omnichannel retail.

In fact, at a time when so many retailers have been closing their physical presence, this type of out-of-the box thinking needs to happen more with retailers. This empowers employees to make a difference that can count in supporting the company and their important roles. Well done Walmart — keep surprising us!

Christopher P. Ramey
BrainTrust

Independent and/or small businesses owners (and employees) have always delivered products “on the way home.” Why not?

Employees will like it because they get out of the store earlier. They’ll also, if they carefully manage it, keep count on mileage for tax purposes. Management will enjoy leveraging a key differentiator: feet on the street to serve clients.

The only “ah-ha” to the strategy is why it took so long.

Tom Dougherty
Guest

Ewww. I don’t like this idea at all. Delivery is the knee-jerk response from retailers to Amazon’s domination. Using in-store employees feels like a cheap way out and, as an avid online purchaser, I wouldn’t feel good about it. This feels like Walmart floating an idea to gauge interest rather than a firm initiative. It flatly doesn’t sound professional.

Dave Bruno
BrainTrust

Clearly there are compensation and execution issues to be resolved, but I sincerely applaud Walmart’s efforts to find ways to leverage existing investments in the store to expand store relevance. This program helps them leverage the store as a competitive asset against Amazon and further increase the store’s value to both the shopping journey and the enterprise. I hope they can overcome the challenges listed here and compensate associates fairly — and that others are inspired to find more ways to increase store relevance.

Lee Kent
Guest

As always, there are ups and downs to this concept. I applaud Walmart for thinking outside of the box however I do see how messy this might be to manage. The employees sound like they want flexibility in this but Walmart has still made promises to the customers. How do you manage a moving target like that? I’m not sure but am interested to see. And that’s my 2 cents.

Joan Treistman
BrainTrust
My gut reaction is that there are too many landmines in this initiative for it to have a happy ending. First, I don’t see this as an equal opportunity for employees, especially the ones who don’t own a car or drive to work. It won’t work for bus riders. There are too many pitfalls in an unstructured approach to delivery. On the way home is probably in the evening. Un-uniformed citizens showing up on streets, walking up to homes with packages sounds like an invitation for “see something, say something” false alarms. Does that put the employee at risk? What else can go wrong? The package gets delivered to an incorrect address. It gets lost. The product is broken on the way. The car is in an accident and the delivery is delayed, maybe forever. How do you track package whereabouts? Does the employee shoulder the responsibility for correct and on-time delivery? Further, I don’t see the long-term upside for Walmart. Uneven delivery streams will lead to scattered successes and failures. Shoppers will remember and… Read more »
Ross Ely
Guest

Walmart will need to be very careful to structure this service as being clearly advantageous for their employees. It must be perceived as fully voluntary, with no negative repercussions for employees that decline to participate.

If Walmart makes the program lucrative enough for employees, it could in fact be a win all around. Walmart would reduce its delivery costs while employees would earn extra income and shoppers would get their packages more quickly.

Cathy Hotka
BrainTrust

This feels like a “what could go wrong?” moment from a number of angles — but I’ll address the “voluntary” aspect. Does anyone really think that associates won’t be pressured to do this? If they refuse, what’s the alternative? And remuneration to an associate would have to be less than a shipping service like FedEx would charge. I have never understood the economics of shipping heavy household items like liquid detergent (as Mr. Lore did at Jet) and this approach doesn’t seem to add up either.

Lee Peterson
BrainTrust

OMG, in the long run, this is a disaster waiting to happen. The number one law of retail is Murphy’s Law. Someone will eventually die in a car crash delivering packages, someone will steal them, someone will spill a drink on them, on and on (just ask UPS). The downsides are endless. And I’m not sure how it actually benefits employees, especially those who have to pick up kids or get dinner or, yeah, on and on.

Having said that, I do like the fact that they’re at least thinking of truly outside-the-box scenarios. In order to survive retailers will need to “think like Bezos” all the time, not just some of the time, and this fits that bill. It’s a little misguided but, from a macro level, nice.

Harley Feldman
BrainTrust

Having associates deliver packages to Walmart customers on the way home is a creative way for Walmart to distinguish itself in customer service. It would certainly set Walmart apart from Amazon using third-party delivery services.

Walmart is trying it right with a pilot project in three stores and only asking volunteer employees to deliver the packages. If it works well logistically, and the volunteer employees are willing to deliver the packages and get paid for doing it, it should be a win-win-win for the consumers and Walmart. An additional benefit will come from the likely appearance of the same delivery person going to the customer’s house repeatedly based on the small delivery area being assigned to the employee and the connection that will be built between the customer and the Walmart employee.

Peter Charness
BrainTrust

Hardly a scaleable, predictable resource that can be used to guarantee deliveries. See what happens at Christmas when the volume of deliveries exceeds the unpredictable capacity. Walmart has more locations closer to the customer than Amazon. As long as Uber is happy to lose almost $1 billion per quarter subsidizing travel in that last mile, stick them with the loss on home delivery. At some point the customer will actually have to pay fairly for the cost of delivery.