Commentary

Walmart Expanding Home Delivery To 100 Cities, Intensifying Battle

Going head-to-head in its door-to-door war with behemoth Amazon, as well against as legacy supermarkets and upstart wholesale clubs, Walmart said yesterday that it is expanding its Online Grocery Delivery option from six metro areas to more than 100 of its markets — containing more than 40% of U.S. households — by the end of the year. It will also add 1,000 stores to its Online Grocery Pickup service, which lets customers retrieve items they’ve ordered online without leaving their cars, to the 1,200 stores now offering it.

“Deliveries will be handled by Uber Technologies Inc. and other providers, and will carry a $9.95 service fee — with a $30 minimum purchase,” writes Matthew Boyle for Bloomberg Technology. “The move into home delivery is part of Walmart’s broader push to get more of its in-store shoppers to start buying online as well, where they typically spend twice as much.”

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Walmart will identify the cites involved as they come online. Orders can be placed on Walmart.com/grocery or on the Apple or Android Walmart Grocery app.

“The plan also includes using Jet, the online retailer Walmart purchased in 2016, to offer a same-day grocery-delivery service in New York City to compete with Prime Now, Amazon.com Inc.’s one- and two-hour delivery service, said people familiar with the plan,” reports Sarah Nassauer for the Wall Street Journal.

“There is no subscription required, as is the case for Amazon Fresh and a handful of other, more costly options on the market,” write Lauren Thomas and Lauren Hirsch for CNBC. “For packing the items together in stores, Walmart will use its collection of more than 18,000 ‘personal shoppers.’”

Tom Ward, Walmart’s VP of digital operations, told reporters in a conference call that “workers are moving into that position on a weekly basis, as more Walmart stores are outfitted to fulfill orders via its website,” Thomas and Hirsch report.

“‘We are gaining new customers who might not have had access to Walmart previously,’ Ward said about what he's learned from the pilot test of grocery delivery thus far. The service was being offered in Dallas, San Jose, Denver, Phoenix, Tampa and Orlando,” they write. “For shoppers who are new to the program when it rolls out later this year, Walmart is offering $10 off a first order of $50 or more, and free delivery if a basket also meets that threshold.”

Indeed, customers can get their first order delivered for free with promo code FRESHCAR. It’s the service equivalent of putting cartons of milk in the back of the store.

“Walmart gets about 56% of its annual U.S. sales from its food business and relies on its grocery offering to cultivate customer loyalty,” points out Fortune’s Phil Wahba.

“Last year, Walmart showed just how willing it is to push its own thinking when it was testing a service with tech company August Home in which workers can bring deliveries all the way into customers kitchens and even unload the items into their refrigerator and freezer in their absence,” he writes.

“We’re moving fast,” Ward tells Bloomberg’s Boyle in an interview. “We will be pretty aggressive with it.”

They're not the only ones.

“Over the last six months, Costco Wholesale Corp., Kroger Co. and other retailers added more cities and products shoppers can order through Instacart, a delivery startup that uses contract workers. In December, Target Corp. acquired Instacart rival Shipt for $550 million,” the WSJ’s Nassauer reminds us.

“Amazon has also ramped up food-delivery options, allowing home delivery from Whole Foods in six metro areas over the past month. That adds to a network of Amazon grocery delivery options in dozens of cities,” she continues.

“Sam's Club, the membership warehouse store arm of Walmart, teamed up with delivery service Instacart last month to offer same-day drop off of fresh vegetables, meat and other items to customers in Austin, St. Louis and Dallas-Ft. Worth,” writes Charisse Jones for USA Today. “… And on Tuesday, BJ’s Wholesale Club said that it will be offering same-day delivery of meats and produce, along with diapers and other items, at all of its 215 clubs by the end of next month. The same-day service is currently available at more than 70 locations.” 

Home delivery isn’t a new concept, of course, but it’s safe to say it is rapidly evolving. Soon to play in a market near you: unmanned delivery vans and descending drones.

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