Walmart testing new online order delivery strategy
BENTONVILLE, Ark. — In its latest effort to compete with online giant Amazon, Walmart is testing a delivery service using its own store employees, who will deliver packages ordered online while driving home from their regular work shifts.
The “associate delivery” program would use Walmart’s 4,700 U.S. stores and roughly 1.2 million employees to speed delivery and cut costs, the company said Thursday. The announcement came just a day before the company’s annual meeting.
The world’s largest retailer says workers can choose to participate and would be paid. The service is being tested at two stores in New Jersey and one in Arkansas.
Walmart has stores within 10 miles of 90 percent of the U.S. population, the company says.
“Now imagine all the routes our associates drive to and from work and the houses they pass along the way,” Marc Lore, CEO of Walmart’s U.S. online operations, wrote on the company website.
Ravi Jariwala, a Walmart spokesman, said all those employees driving home represent a “very dense web” of potential delivery locations for the company.
Employees who want to participate will be able to use an app to specify how many packages they are willing to deliver, Jariwala said, as well as the weight and size limits on the packages. Jariwala would not provide details about how workers would be paid, but said the company would comply with all federal and state minimum wage and overtime laws.
“This is completely an opt-in program,” he said Thursday. “This is not something they are required to do.”
So far, employees “love having the option to earn more cash while doing something that’s already part of their daily routine,” Lore wrote.
Some critics of Walmart’s labor practices questioned how voluntary such a program will be.
“When so many workers are paid so little that they need government assistance to make ends meet, it becomes a necessity, not a choice, to do what they can to earn more,” said Randy Parraz, director of Making Change at Walmart, a group funded by the United Food and Commercial Workers.
The move could result in significant cost savings, though the company didn’t provide estimates of how much. Still, the final delivery step to a customer’s home — what the industry refers to as the “last mile” — “makes up the lion’s share of fulfillment costs,” Jariwala said.
The move is the latest step in Walmart’s campaign to counter Amazon’s online dominance. Shoppers on Walmart.com already can choose to pick up items at a nearby store for a lower price.