Walmart Launches Crowd-Sourced Grocery Delivery Service
Will this help Walmart compete with Amazon?
Walmart is getting serious about grocery delivery. Last week the retail giant announced the launch of Spark Delivery, a new last-mile delivery service, that will help the company expand its grocery delivery options for online grocery shoppers. Walmart is currently testing Spark Delivery in Nashville and New Orleans and plans to try out the service in a few additional metropolitan areas later this year. The company has not yet disclosed those additional locations.
“We’re saving customers time by leveraging new technology, and connecting all the parts of our business into a single seamless shopping experience: great stores, easy pickup, fast delivery, and apps and websites that are simple to use,” said Greg Foran, president and CEO of Walmart U.S., in the September 5 announcement. “We’re serving our customers in ways that no one else can. Using our size and scale, we’re bringing the best of Walmart to customers across the country. Spark Delivery is one way we’re exploring how to get quality groceries from our door to our customers’ doors.”
To man the crowd-sourced delivery service, Walmart has partnered with Delivery Drivers, Inc. (DDI), a nationwide company that specializes in working with last-mile contract drivers. DDI handles recruiting, screening, background checks and payment of the drivers, each who are paid by the delivery. DDI also provides other services to the drivers to support them as entrepreneurs.
“It is important to us at DDI that we help each independent driver run their transportation business correctly,” said Aaron Hageman, DDI CEO. “We are excited to partner with Walmart to allow them to focus on providing great products while we can build and support a professional driver network to focus on the delivery side of the business.
In addition to Spark Delivery, Walmart contracts with other third-party crowd-sourced delivery providers. Walmart’s Grocery Delivery service is available in close to 50 markets including Atlanta, Chicago, Denver, Miami and Seattle.
“Our customers love Grocery Pickup and Delivery – it offers convenience paired with the everyday low prices customers expect from us,” said Tom Ward, vice president, Digital Operations of Walmart U.S. “We’re always looking for the best ways to serve them, so we’re exploring a number of different options for getting groceries from our stores to the customer’s front door – some in-house, some third-party.”
Walmart also offers a grocery pick-up service in 1,800 stores. The company plans to expand the pick-up service to 2,100 stores by year end. Regardless of whether they pick-up their groceries or have them delivered, customers shop for their groceries online or through the Walmart grocery app.
Standard grocery pickup is always free. Walmart Grocery Delivery is available for $9.95 per order with a $30 minimum order. Customers can try the service and get their first order of $50 or more for free with a promo code. Walmart’s grocery delivery service does not require a subscription, where Amazon Fresh does.
Could these new grocery delivery options make Walmart a viable competitor for Amazon? Based on the statistics below, yes. According to Statista and MGO, Amazon has the corner on the online grocery market right now at 59.5 percent, but Walmart is second at 25.5 percent. If it continues to expand its grocery delivery service into new markets, and it adds more ways to pay for those deliveries without having to add staff, Walmart could close the gap between the two online grocery leaders.