Walmart to deliver for others
NEW YORK — Walmart said Tuesday it will start farming out its delivery service, using contract workers, autonomous vehicles and other means to transport rival retailers’ products directly to their customers’ homes as fast as just a few hours.
The nation’s largest retailer said it will dispatch contract workers from its Spark delivery network, which was launched in 2018, to merchants’ stores to pick up items and then bring them to shoppers. Over the past year, Walmart has doubled Spark’s coverage to more than 500 cities nationwide, providing access to more than 20 million households.
Walmart, which is based in Bentonville, Ark., aims to tap into its ties with local communities, particularly businesses in rural areas that have struggled to provide their own delivery services.
The strategy will pit Walmart against delivery services run by the likes of Uber and DoorDash. And it comes as Walmart moves to expand its sources of profits and revenues beyond its core retail businesses. It echoes Amazon’s diversification move with its Amazon Web Services cloud computing unit, which the online behemoth built for itself and now sells to other businesses.
Last month, Walmart began offering small- to medium-size businesses the e-commerce technology it developed to let shoppers buy products online and pick them up at stores. It’s part of a partnership with technology provider Adobe.
Walmart said the delivery service, Walmart GoLocal, has already signed a number of deals with national and small-business clients, although it did not name them. It declined to offer figures on the investment or financial targets for the service. Deliveries to the other businesses will begin in the next few months.
The moves are happening as the pandemic has deepened shoppers’ appetite for speedier deliveries, putting more stress on smaller retailers that can’t meet their expectations. Walmart itself has been relying on DoorDash and other crowdsourcing services as well as its own workers to serve its own customers. But it has also been expanding its Spark platform that until now has not delivered nonWalmart goods.
During a call with reporters, Tom Ward, a senior vice president at Walmart’s U.S. division, said that fees for the service will be negotiated on a case-by-case basis. The delivery time could be as fast as a few hours or up to two days. Walmart said it could eventually use drones for delivery.
“In an era where customers have come to expect speed and reliability, it’s more important than ever for businesses to work with a service provider that understands a merchant’s needs,” said John Furner, president and CEO of Walmart’s U.S. division.