Walmart still trying to figure out home delivery
Walmart, like many other retailers, is still trying to work out how to meet the home delivery needs of its customers without losing money in the process.
In March, Walmart announced plans to use its network of 4,700 stores to facilitate delivery of groceries to more than 40 percent of the households in the U.S. by the end of this year.
The move by Walmart to expand its grocery delivery service is seen as a response to Target’s acquisition of Shipt last year, the continuing rollout of Amazon.com’s Prime Now service from Whole Foods and the growing number of deliveries from grocery rivals handled by Instacart.
Target plans to offer same-day delivery using Shipt from the majority of its stores by this year’s Christmas selling season.
Whole Foods announced last week that it had expanded Prime Now deliveries to areas around New York City and Florida to bring its total of markets served to 24. The service, which offers free two-hour deliveries to Prime members, will continue to be expanded throughout the year.
In February, Instacart announced it had raised $200 million in a new round of funding. The grocery home delivery service, which has been valued at $4.2 billion, works with seven of the top eight grocers in North America and more than 200 in total.
To date, Walmart’s best answer to making the home delivery math work has been to provide customers with more reasons to place orders online and go to a store to make a pickup. Walmart plans to have in-store pickup available at more than 2,200 locations by the year’s end.
The retailer, as recently reported by Reuters, has struggled to find the best way(s) to handle home deliveries.
In May, Walmart cut ties with Uber and Lyft, which had been making deliveries in some markets. The retailer shifted to Deliv, DoorDash and Postmates, which have experience delivering food.
Reuters reports that a pilot program launched by Walmart last year whereby associates made deliveries on their way home from work has been scrapped as it failed to get employee buy-in.
When the initiative was first announced in a blog post by Marc Lore, president and CEO of Walmart U.S. eCommerce, it was positioned as “a win-win-win for customers, associates and the business.” Deliveries, the thinking went, would be made “faster and more efficiently,” shipping costs would be cut for Walmart and associates would earn additional pay.
- Walmart discovers why the ‘last mile’ is the hardest – Reuters
- Uber isn’t going along on Walmart’s online grocery ride – RetailWire
- Walmart goes big, goes nationwide with online grocery deliveries – RetailWire
- Amazon rolls out Prime Now deliveries from Whole Foods – RetailWire
- Amazon Expands Grocery Delivery From Whole Foods Market To Fort Lauderdale, Miami, Palm Beach, Long Island And New York City – Amazon.com/Whole Foods Market
- Will Instacart and Shipt give Amazon a run for its money? – RetailWire
- Slowing online sales and reduced profits worry Walmart investors – RetailWire
- Can Walmart workers deliver better last mile results on their way home from work? – RetailWire
DISCUSSION QUESTIONS: How can retailers such as Walmart make grocery home delivery profitable? Do you see any retailer and/or service as the likely winner of the grocery home delivery competition?