Wal-Mart is test­ing on­line or­der de­liv­ery ser­vice

Its em­ploy­ees are bring­ing pack­ages to cus­tomers on their way home from work.

Los Angeles Times - - TRAVEL & TOURISM - As­so­ci­ated press

In its lat­est ef­fort to com­pete with on­line gi­ant Ama­zon, Wal-Mart 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 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.

Wal-Mart has stores within 10 miles of 90% 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, chief ex­ec­u­tive of Wal-Mart’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. “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 Wal-Mart’s cam­paign to counter Ama­zon’s on­line dom­i­nance. Shop­pers on Wal­mart.com can al­ready choose to pick up items at a nearby store for a lower price. Wal-Mart has also re­vamped its ship­ping pro­gram and of­fers free, two­day ship­ping for on­line or­ders of its most pop­u­lar items with a min­i­mum pur­chase of $35.

In its tests so far, Wal­Mart says “many” pack­ages are ar­riv­ing at cus­tomers’ homes just a day af­ter an or­der has been placed.

Par­tic­i­pat­ing em­ploy­ees will have to un­dergo back­ground checks and a check on their driv­ing records, Jari­wala said.

Faster ship­ping has be­come a key area of com­pe­ti­tion as on­line re­tail con­tin­ues to grow at a dou­ble-digit pace, while tra­di­tional brickand-mor­tar stores strug­gle with fall­ing sales.

Mem­bers of Ama­zon’s $99-a-year Prime ser­vice in thou­sands of ar­eas can re­ceive or­ders the same day or the next, de­pend­ing on the item and lo­ca­tion. And in about 30 cities, Prime Now mem­bers can get some items in an hour or two.

Wal-Mart has pre­vi­ously tested de­liv­ery ser­vices us­ing Uber driv­ers. Jari­wala said that test is still go­ing on.

But Lore noted that the em­ployee de­liv­ery ser­vice would save a step com­pared with third-party ser­vices that re­quire a driver to travel to a store to pick up a pack­age, then de­liver it, then re­turn home.

Wal-Mart work­ers would sim­ply travel from the store they al­ready work at to make the de­liv­ery.

Jeff Chiu As­so­ci­ated Press

WAL-MART has stores within 10 miles of 90% of the U.S. pop­u­la­tion, the re­tailer says. Above, work­ers in the lobby of the Wal­mart.com of­fice in San Bruno, Calif.

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