Walmart wants to deliver you stuff, even if you didn't buy it at Walmart. A Walmart Express Delivery van is here parked in the Chelsea neighborhood of New York on Friday, August 14, 2015.
Next time you order that waffle maker or rice cooker, it could be delivered to you by Walmart, even if that's not where you bought it.
The company said Tuesday that it's launching a new service that delivers goods sold by other businesses to customers. The service will be ready in time for the holiday shopping season, the busiest stretch of the year for retailers.
Walmart said it had struck delivery agreements with national and local businesses, but did not say which ones. It also did not disclose the fees it would charge businesses for deliveries, but said they would be at "competitive pricing."
Walmart is looking for ways to grow beyond its main retail business and build new revenue streams in areas such as advertising, fulfillment services for merchants on its own online marketplace, and financial technology. Walmart's new delivery service, called GoLocal, is the latest part of its strategy.
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Walmart hopes to give businesses a new option in last mile-delivery, the final leg of an online order's route to a customer's home. The company said it will use the network of independent contract drivers on its in-house Spark delivery platform to deliver items from other merchants. Currently, Walmart uses Spark drivers to deliver some online orders from its stores in around 500 cities.
Walmart is betting that it can use its vast footprint around the United States and logistics expertise to offer deliveries, especially in suburban and rural markets that it believes are underserved by parcel carriers and other platforms, said Tom Ward, senior vice president for last mile at Walmart, on a call with reporters Monday.
Indeed, retail experts say the new service may serve businesses struggling with high costs of delivery or fill the coverage voids left by providers like UPS and FedEx.
"The last mile and home delivery space has been a costly offering for almost all retailers," Tyler Higgins, head of the retail practice at global management consulting firm AArete, said in an email. "The need for improved and efficient delivery is growing and there's still a gap in the market that [package carriers] can't meet."
But Walmart's competition in the logistics space will be steep as competitors like Target-owned Shipt, DoorDash and Amazon introduce more same-day shipping options.
Last-mile delivery is typically a money-losing venture, and Walmart will need to pull a large number of orders together to make deliveries profitable, say analysts.
This could be challenging to do picking up orders from several different merchants at a time, rather than delivering them from a central location, said Daniel McCarthy, a professor at Emory University's Goizueta School of Business who studies online delivery companies.
"A big open question will be Walmart getting the economics to work," McCarthy said. "It will be logistically more cumbersome and thus expensive to manage many small fish instead of a few whales."
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How 4 of the biggest food-delivery apps stack up
Grubhub
Cost: $12.17
- Menu item: $6.50
- Sales tax: $0.63
- Delivery fee: $0
- Service fee: $1.04
- Small-order fee: $2
- Tip: $2
Speed: 28 minutes
App user experience: Streamlined platform that allows for fast decision-making
Customer service: Accessible
Premium subscription: Grubhub+, $9.99/month for free delivery over $12 and discounts
Grubhub gave me the fastest, cheapest delivery. I received free delivery since it was my first order; otherwise, the app determines this fee based on the distance between the customer and the restaurant. In addition, I was charged a service fee of only 15% of my subtotal, much less than on other apps. But my subtotal fell under $10, so a $2 small-order fee was tacked on. On each restaurant’s page, you can see delivery fees, ratings, cuisine type and estimated delivery window.
During the delivery process, the app lagged in tracking my order. After receiving notifications that my driver was on their way to the restaurant, the app stopped updating, but my food still arrived with the fastest delivery time of 28 minutes.
You can call the customer-service line or use the in-app messaging system to report problems. I reported the tracking glitch and got a prompt apology and explanation about the malfunction.
Uber Eats
Cost: $13.92
- Menu item: $6.50
- Tax: $0.43
- Service fee: $2.50
- Delivery fee: $2.49
- Tip: $2
Speed: 30 minutes
App user experience: Overwhelming number of functions and restaurant options
Customer service: Inaccessible
Premium subscription: EatsPass, $9.99/month for free delivery and a 5% discount on orders over $15
Uber Eats charged moderate fees without any new-customer deals. I was charged a $2.49 delivery fee, determined by factors such as distance from the restaurant. Service fees are area-specific and subject to minimum and maximum amounts. Small-order fees may also apply.
The app’s homepage generates endless options, and the crowded interface can feel hard to navigate. Under each restaurant name is its in-app rating, delivery fee and estimated delivery window.
After ordering, I received notifications every step of the process. I could contact the delivery person via the app and track their movement. While the delivery was estimated to take 40 to 50 minutes, the order came in 30.
For customer support, press the “help” button for a specific order. You then message a chatbot. This automation made it difficult to get in touch with a live person.
Postmates
Cost: $18.92
- Menu item: $6.50
- Tax: $0.43
- Service fee: $3
- Delivery fee: $6.99
- Tip: $2
Speed: 29 minutes
App user experience: Overwhelming number of functions and restaurant options
Customer service: Inaccessible
Premium subscription: Postmates Unlimited, $9.99/month for free delivery on orders over $15
Since Uber Eats bought Postmates in July 2020, their respective interfaces have become nearly identical, although Postmates displays additional categories since the platform delivers from pharmacies and convenience stores, too.
However, my Postmates order cost significantly more than Uber Eats. Delivery fees range from $0.99 to $9.99, and my service fee equaled almost half of my subtotal. You may also get hit with a $1.99 small-cart fee if your total is under a certain amount, which varies by location, according to a Postmates representative. Altogether, the total cost of my order was triple the menu item, though the speed did somewhat justify the high delivery fee. My estimated delivery window ranged from 40 to 70 minutes; my order arrived in 29.
Like with Uber Eats, I received notifications throughout the entire process and could monitor my order through the app. You’ll also likely encounter customer support similar to Uber Eats.
DoorDash
Cost: $12.41
- Menu item: $6.50
- Tax: $0.43
- Delivery fee: $0
- Service fee: $3.48
- Tip: $2
Speed: 29 minutes
App user experience: Simple and functional, but a glitch created confusion over order confirmation
Customer service: Accessible, but didn't offer clear explanations of problems or offer any compensation
Premium subscription: DashPass, $9.99/month for free delivery and reduced fees on orders over $12
DoorDash offered free delivery through the “first month welcome deal” but charged a service fee a little over half of our subtotal. DoorDash’s website says they may charge extra for orders below a minimum subtotal or when demand is high.
The app’s homepage organizes the restaurants into categories, including the top-rated restaurants near you, the fastest spots near you and national chains. Under each restaurant is the overall rating, the number of reviews, price level, type of cuisine, delivery fee and estimated time of arrival.
After completing the order, a glitch locked me on an “order processing” page; I could not exit to contact customer service or cancel the order. I never received an order confirmation, though I did receive my food. I was able to report the glitch to live customer support, but in messaging with four people, I had to re-explain the problem and received the same apology without an explanation.
