Walmart Readies Last-Mile Delivery Service

Online Shopping Demand Surges

Walmart (WMT) is preparing for the holiday season, launching a delivery service to make sure merchants get their products to customers on time. The retailer is trying to capitalize on the huge uptick in ecommerce driven by the pandemic. FedEx (FDX) and UPS (UPS) struggled last holiday season to meet the surging demand and that is expected to remain strong this year. UPS recently said during the peak of the 2021 holiday season there will be about five million more packages per day than delivery companies can handle.

Walmart has been testing its last-mile delivery service this year, using its own vans to deliver packages for merchants. It is something Amazon (AMZN) already offers to companies which sell on the platform.

Drones, Self-Driving Delivery Vehicles

Walmart’s new service, GoLocal, will send workers from its Spark delivery network to merchants to pick up products for delivery. Walmart currently has Spark delivery networks in over 500 cities across the country. The retailer has not disclosed how much it will charge for the service but said it will be competitively priced.

Walmart plans to begin service at the end of the year and will utilize advanced technologies including drones and self-driving vehicles to deliver parcels. Some of Walmart’s delivery partners include self-driving vehicle startups Cruise, Waymo, and Nuro, and also drone companies DroneUp, ZipLine, and FlyTrex. It is not clear if Walmart partner FedEx will be part of the local delivery service. Walmart is going up against Amazon’s Flex service which delivers packages for merchants via contracted vans.

Walmart Takes a Long-Term View

GoLocal is years in the making with Walmart pouring billions of dollars into its efforts to deliver goods to customers. It began with its purchase of Jet.com in the summer of 2016, followed by the launch of a grocery-delivery service in 2018, and Walmart Fulfillment Services last February. All are designed to control the online shopping experience and boost revenue for the retailer.

With demand for online shopping here to stay and with the main delivery companies already overwhelmed, Walmart sees a big opportunity. So does Amazon. It will be interesting to see how these two rivals duke it out over the last mile.

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