Tech Crunch this morning reports that Walmart plans to test grocery delivery, utilizing services such as Uber, Lyft and Deliv to bring products from its eponymous and Sam's Club stores to consumers' homes.
According to the story, the announcement follows "the launch of a similar pilot program in Miami in March. There, Walmart-owned Sam’s Club is using the parcel delivery service Deliv to test delivery of general merchandise and groceries for its business members in the area."
The test will allow customers to order from Walmart's websites and get products delivered "for a small fee." The orders will be filled by "specially trained Walmart Personal Shoppers" who "are trained to understand how to select the best meat and produce, and they quickly place frozen and fresh items in a designated, temperature-controlled holding area in the back of the store." Drivers will be summoned via text message and informed that it is a grocery delivery, not a passenger pickup; customers will then be alerted that the delivery is on its way.
Walmart says it is "starting small" with tests in Denver and Phoenix and "will let customers guide the process going forward."
Tech Crunch notes that "this is not Walmart’s first experiment with grocery delivery. The retailer also has long run grocery delivery pilots of its own in both Denver and San Jose, California. However, it has not yet moved to expand upon that program. That hints that the company hasn’t figured out how to make the economics of home grocery delivery successful as an in-house program, or that customer demand hasn’t been as strong."
Walmart has been more focused recently on offering pickup services, saying that "pickup makes more sense for its customer base, who are more concerned with the cost of groceries rather than the convenience of doorside delivery, which tends to be pricey. Walmart doesn’t markup the cost of groceries, nor does it charge a pickup fee."
That focus will continue, Tech Crunch writes. Grocery pickup "was expanded in April to a number of new markets across the U.S., while also doubling its presence in some of its larger, established markets. This allowed Walmart to widen its footprint to 30 U.S. cities, it said at the time. It’s now live in 40 markets, and is now announcing expansions into 14 more in June. By the end of July, Walmart will nearly triple the number of stores and markets that offer the service, compared to when it began expanding at the beginning of April 2016."
According to the story, the announcement follows "the launch of a similar pilot program in Miami in March. There, Walmart-owned Sam’s Club is using the parcel delivery service Deliv to test delivery of general merchandise and groceries for its business members in the area."
The test will allow customers to order from Walmart's websites and get products delivered "for a small fee." The orders will be filled by "specially trained Walmart Personal Shoppers" who "are trained to understand how to select the best meat and produce, and they quickly place frozen and fresh items in a designated, temperature-controlled holding area in the back of the store." Drivers will be summoned via text message and informed that it is a grocery delivery, not a passenger pickup; customers will then be alerted that the delivery is on its way.
Walmart says it is "starting small" with tests in Denver and Phoenix and "will let customers guide the process going forward."
Tech Crunch notes that "this is not Walmart’s first experiment with grocery delivery. The retailer also has long run grocery delivery pilots of its own in both Denver and San Jose, California. However, it has not yet moved to expand upon that program. That hints that the company hasn’t figured out how to make the economics of home grocery delivery successful as an in-house program, or that customer demand hasn’t been as strong."
Walmart has been more focused recently on offering pickup services, saying that "pickup makes more sense for its customer base, who are more concerned with the cost of groceries rather than the convenience of doorside delivery, which tends to be pricey. Walmart doesn’t markup the cost of groceries, nor does it charge a pickup fee."
That focus will continue, Tech Crunch writes. Grocery pickup "was expanded in April to a number of new markets across the U.S., while also doubling its presence in some of its larger, established markets. This allowed Walmart to widen its footprint to 30 U.S. cities, it said at the time. It’s now live in 40 markets, and is now announcing expansions into 14 more in June. By the end of July, Walmart will nearly triple the number of stores and markets that offer the service, compared to when it began expanding at the beginning of April 2016."
- KC's View:
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It seems to me that Walmart is trying to do is create a real e-commerce-oriented momentum, as it expands grocery pickup and tests different methods of grocery delivery. My sense is that this is designed as much to compete with Kroger's expansion in this segment as well as all the stuff that Amazon is doing ... Walmart understands that it isn't hard to be left behind, and that innovations have to be constantly developed and tested and implemented and even occasionally discarded in favor of something else. It is a constant, energizing, sometimes perilous churn of ideas ... and Walmart either has to be part of it or not.
This doesn't mean that Amazon and Kroger and everybody else in the e-grocery arena will stop innovating or even slow down. Far from it, and almost certainly to the contrary. But Walmart's moves in this area should make the case to everyone that they need to be in the game ... and if they're not, they'd damned well better have a compelling competitive offering that compensates for not being in the e-commerce business.
