Postmates to power Walmart’s grocery delivery
In a move to further strengthen its online grocery delivery service, Walmart (WMT) has teamed up with Postmates. Walmart has rolled out the service in Charlotte, North Carolina, and plans to expand to newer markets covering about 40% of US households in the coming months.
Postmates is an on-demand delivery service provider that uses local couriers to quickly deliver groceries or anything else to consumers’ doorsteps. Partnering with Postmates will further supplement Walmart’s own home delivery service. Walmart has been testing several delivery programs aimed at offering more convenience to shoppers. In a similar move, the company partnered earlier with Uber. It also acquired Parcel to test two-hour, same-day delivery or overnight delivery of online orders in New York City.
Why home delivery matters
Retailers have been putting significant resources in their delivery platforms as they fight against Amazon (AMZN) for a greater share of consumers’ wallets. They’ve been partnering with delivery service providers such as Instacart to supplement their delivery programs.
Target (TGT) expanded its online grocery delivery options through its acquisition of Shipt and Grand Junction. The company plans to offer same-day-delivery of online orders through Shipt in the majority of its stores by the end of 2018. Costco (COST) and Kroger (KR) teamed up with Instacart to offer home delivery of online orders. Amazon announced that it is expanding grocery delivery for Whole Foods to Los Angeles.
As quick delivery remains a key to drive online traffic, Walmart is not trailing its rivals, announcing earlier that it plans to expand its home delivery of groceries to 100 cities. It has also expanded its online grocery pickup service to about 1,200 stores and remains on track to add another 1,000 locations by the end of this year. It’s also adding 500 additional pickup towers in its stores to save time and money for more of its shoppers.
Walmart’s online grocery delivery service, unlike Amazon Prime, does not require a subscription and carries a flat delivery fee of $9.95 and a minimum order of $30. Walmart’s consumer-friendly moves are likely to accelerate growth in its e-commerce business, which saw a significant slowdown during the last reported quarter, as you can see in the above graph.