Do new Shipt and Walmart programs signal big changes to come in the retail delivery market?


Target-owned Shipt and Walmart each introduced new programs this week that may substantially affect the U.S. delivery market.
Shipt has always played up the ability it gives its shoppers who pick orders to communicate in real time with customers. The company is looking to build on that edge with the launch of its Preferred Shopper program. This enables Shipt subscribers to create a list of shoppers that they prefer to pick and deliver future orders.
Customers who give shoppers a five-star rating for an order may add them to their Preferred list. If the shopper accepts the request, they will be given priority status when it comes to filling future orders for those customers.
“The more often a shopper shops for a customer, the more they learn about that customer’s wants and needs and are able to deliver a tailored shopping experience,” said Karl Varsanyi, chief experience & product officer at Shipt, in a statement. “Preferred Shoppers helps customers get the exceptional service they enjoy again and again.”
Shipt said it developed the new perk for members at the request of customers and shoppers. The delivery service tested the program and found it delivered higher satisfaction scores for both its members and shoppers.
The company said that the regular pairing of shoppers with customers resulted in the placement of more orders and fewer issues with those that were delivered. Shipt said that roughly 95 percent of those in test markets made use of the Preferred Shopper option as soon as it was offered.
Walmart announced yesterday the launch of GoLocal, a new service that delivers orders for other businesses across the U.S. The white label service uses third-party drivers to handle orders. Walmart has promised competitive pricing and said it has already signed deals with national clients as well as smaller businesses.
“We’ve worked hard to develop a reliable last mile delivery program for our customers,” said Tom Ward, senior vice president, last mile, Walmart U.S. “Now, we’re pleased to be able to use these capabilities to serve another set of customers, local merchants. Be it delivering goods from a local bakery to auto supplies from a national retailer, we’ve designed Walmart GoLocal to be customizable for merchants of all sizes and categories so they can focus on doing what they do best, leaving delivery speed and efficiency to us.”
- Shipt Members Can Now Handpick Their Favorite Shipt Shoppers – Shipt
- Walmart Launches Walmart GoLocal, a New Delivery as a Service Business – Walmart
DISCUSSION QUESTIONS: What will the Shipt Preferred Shopper Program and Walmart GoLocal mean for these companies and their competitors in the market? Where do you see the U.S. delivery market heading over the next few years?
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24 Comments on "Do new Shipt and Walmart programs signal big changes to come in the retail delivery market?"
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Principal, Retail Creative and Consulting Agency
The last mile landscape is changing so rapidly and it’s great because it puts the customer at the center of it all. The onus is on Target, Walmart, Jokr, Getir, 1520 and everyone else promising impeccable service to deliver it to the customer. The ones that do will win. The ones that falter, well, won’t.
President, What Brands Want, LLC
The U.S. delivery market is still very much in start-up mode and is nowhere near stable. While COVID-19 accelerated e-commerce and delivery years in advance it did so in a linear manner. New technology, new methods, and new players will arrive with compelling choices for consumers (and retailers). The competition will become more fierce and the players will shake out.
Vice President, Strategic RelationsHamacher Resource Group
I agree 100 percent, Michael. I believe we ain’t seen nothin’ yet! The service model for delivery and customer-centric care is rapidly evolving, but the end game has not yet been realized. Although impressed with both Walmart and Shipt — tomorrow, next week, or next month, something more remarkable may emerge.
Vice President, Strategic RelationsHamacher Resource Group
Walmart has recognized that simply selling products is a commoditized business proposition. Adding service and new levels of customer touchpoints creates longstanding customer relationships.
As Walmart launches GoLocal, thus commercializing its delivery capabilities behind a white-label “delivery as a service” model it would offer to other merchants, on the heels of its technology licensing play announced last month, it has become a legitimate “service provider” rather than a monolithic retailer.
Shipt — which we must remember is owned by Target — is moving closer and closer to its customers and offering preferred service levels. This is a wise move that further differentiates the transaction of delivery to something very personal.
The last mile of delivery will continue to be a game-changer for retailers and the bar has been raised yet again.
President, Spieckerman Retail
The two announcements are quite different as Shipt is offering an enhancement to its existing program targeted to shoppers and Walmart is launching an entirely new one as a B2B-focused platform monetization play. Both confirm that services and solutions are a major retail growth opportunity and continuous improvement and ongoing iteration will be the norm.
Consulting Partner, TCS
Very significant incremental innovation. While consolidating their respective brands, Walmart in particular could be threatening to traditional players like UPS, FedEx and local delivery companies that work with businesses.
Marketing Strategy Lead - Retail, Travel & Distribution, Verizon
The Shipt Preferred Shopper Program enables more opportunities for top performing shoppers and creates greater customer loyalty as consumers will have more confidence in their selected shopper. In some respects, it is similar to programs like Uber and Lyft where customers rate their experience with drivers and it rewards the top performers. Walmart’s GoLocal service is a great way for small businesses to offer delivery services without investing much time or effort.
Co-founder, RSR Research
Minor correction: Instacart also gives its pickers the ability to communicate with customers.
Having said that, having a “preferred shopper” is a brilliant idea. It makes the shopper “stickier” in the gig economy and definitely makes life easier for the customer. The shopper will learn your preferences after a while.
Walmart is definitely wanting to be Amazon Plus. The Shopify deal was brilliant. Now we have to see if those third parties they’re hiring “can deliver.” If they can, watch a formerly staid universe (grocery) change!
Principal, The Feedback Group
The ability to select a preferred shopper is a game changer for Shipt. I’ve used the service numerous times and often wondered why I couldn’t have a preference for certain shoppers given the very high level of service of some versus others. This level of personalized service makes this more than just a delivery service — it builds the relationship in as a key component, which creates a much stronger bond between shopper and customer.
CPG/Retail enthusiast, blogger and a couch potato warrior
With the Shipt program, it seems like the start of a trend towards personalization of last-mile delivery – providing a mom-and-pop experience through the last-mile service! On the other hand, mom-and-pop stores can use Walmart’s last-mile capability to provide a large store format-like service!
Founding Partner, Merchandising Metrics
I give full credit to Michael Zakkour on Twitter for coining the best new acronym I have heard in a long time. LMASS = Last Mile as a Service. It had to happen.
Principal, Mark Heckman Consulting
As physical retailers continue to invest to become more like Amazon, Amazon is investing in brick-and-mortar stores to become more like them. In the end, a few big retailers will drive the majority of the last mile business, as they will be the only ones who have the scale to do so profitably.
Director, Retail Market Insights, Aptos
Same-day delivery is primed for innovation, with serious market share available for those who lead. Brick-and-mortar stores have a huge advantage over online players in this arena if they can find reliable, affordable last-mile delivery partners. Should be an exciting 18 months as this space shakes out and innovative ideas like the (brilliant!) Preferred Shopper program from Shipt start flowing.
Senior Partner, Industry Consulting, Retail, CPG and Hospitality, Teradata
I agree with Michael La Kier, the sands are shifting so fast in the delivery market that as each day goes by, we see another offering, another service, another new entrant in the market. This is great for the shopper — the consumer who gets to trial various services and is the ultimate beneficiary of these cool offerings. Shipt’s new Preferred Shopper offering is a great example of skating to where the puck will be, not where it is. This is awesome evolution in a set of services.
Content Marketing Strategist
Speed, variety and superior service permeate these new retail delivery programs.
Shipt gets even more personalized and attentive, allowing consumers to refine their pool of preferred shoppers. New B2B collaborations allow Walmart GoLocal to deliver everything from muffins to mufflers to our doorsteps.
In the next few years, retail rivals will raise their standards by catering to us like we’re in the top tax bracket. Retailers will invest in logistics and tech partnerships to optimize last-mile delivery speed, reach and profitability. Overall, these trends will deepen the relationships between consumers and companies to nurture loyalty.
Independent Board Member, Investor and Startup Advisor
We can view the last-mile opportunity from one of two distinct strategies. One is scale and efficiency; the other is customer intimacy. Walmart’s GoLocal belongs in the former, while Target’s Shipt in the latter. Walmart is exploring the potential opportunities given its unique supply chain assets and know-how. Target exploits existing customer relationships by adding more benefits and tangible value for their customers and the Shipt shoppers.
Both companies began their journeys as physical retailers relying on customers coming to their stores to make their purchases. Today the path to purchase is a highly dynamic, multi-point experience that combines digital and physical and takes place in a sea of changing customer preferences. There will be many more exciting experiments in the evolution of last-mile deliveries falling into either the efficient low cost or the high personalization model.
Founder, CEO, Black Monk Consulting
Any delivery chain is only as strong as its weakest link. Right now I don’t think there are sufficient screening and vetting safeguards in place to mitigate against a potential worst case scenario of a shopper/delivery agent who commits a criminal act. That said, there is no telling where the delivery market is going since it is still (relatively) new and evolving at such a rapid pace. The only certain thing is that we are going to continue to see more and more innovative models emerge, some of which will succeed and some of which will fail spectacularly.
Principal, SSR Retail LLC
The new retail landscape includes delivery – at least as far as shoppers are concerned. Retailers have two options if they want to stay relevant: go in-house or outsource. Outsourcing has become its own industry and the danger for retailers is the loss of the shopper relationship and further commoditization of their brands.
Contributor, The Motley Fool
Walmart needs this to remain competitive with Amazon, which is expected to surpass Walmart as the largest U.S. retailer by 2025. Earlier this year, Walmart executives told its advertisers it was losing market share to its rivals and Instacart was on an almost equal plane as itself for grocery delivery.
But delivery for local retailers is part of a larger plan to bring small businesses into its ecosystem. Earlier this year it began offering its e-commerce technology to third parties in a bid to help small (and even national) businesses utilize Walmart’s capabilities to establish their own e-commerce presence and offer convenient buy online, pickup in store options.
As noted, it’s a bit of incremental revenue enhancement that can also marginally help increase its own store traffic and sales, but one which also helps thwart an accelerating slide in retail dominance.
CEO, Perch Interactive
Retailers are worried about whether they are being disintermediated by Instacart and other delivery services that own the customer-facing interface for ordering, and increasingly will split orders by price or fulfill themselves. Now retailers have to decide whether they will get in bed with their competitor like a Walmart or Shipt.
Interestingly, Shipt now has less GOV than before the pandemic and is rapidly losing share. Is this because it’s associated with Target? Maybe retailers don’t want to give their customers, pricing and order info over to competitors after all….
Editor-in-Chief, CPGmatters
The US delivery market is still evolving. As always, there will be winners and losers. It’s survival of the fittest. Thank goodness, the shopper will benefit the most by receiving the best service possible.
Vice President, Research at IDC
Chief Analytics Officer, Quotient
Delivery in CPG is no longer just about stocking up and pantry loading. I think we’ll see the US delivery market evolve into one that has more options for consumers as they get comfortable with frequently used products and brands being delivered. Shipt’s announcement is a great example of this. Shoppers want a delivery experience that fits their needs and offers convenience and reliability.
AVP - CPG and Retail, Capgemini America
Its not difficult to see that Walmart was planning this almost in lock step with their deal to get Shopify merchant on Walmart.com; now it will be a breeze for those smaller merchants to use the new delivery services too. Love Walmart’s move to becoming a crowd-sourced Service provider of sorts, taking their competition with Amazon and Target-Shipt to these critical retail dimensions of marketplace — last mile and services.