Having trouble getting your goods to customers' doorsteps? Walmart says it can help you with that.
The world's largest retailer this week announced the creation of Walmart GoLocal, a last-mile delivery service for merchants of all sizes. The move puts Walmart in competition with other platforms that partner with third-party merchants, including Uber, Instacart, Amazon, and DoorDash.
The company will use its network of independent contract drivers from Spark, its delivery platform, to deliver goods from GoLocal, according to CNN. Walmart first began delivering online orders through Spark in 2018. The platform matches gig workers with available delivery jobs from local Walmart stores. The company rapidly expanded its use of the Spark platform during the pandemic, as demand for grocery delivery grew.
According to the Walmart website, customers will first place an order through the local merchant's website. The merchant's commerce platform will then ping Walmart, which will dispatch a Spark delivery driver.
Entering into the last-mile delivery space is another way for Walmart to keep up with other e-commerce platforms. The company first began offering free two-day delivery in 2017 for orders over $35, offering consumers an alternative to Amazon Prime. Since then, the company has grown its logistic network, adding more fulfillment centers and warehouses.
Many small businesses have struggled to make a profit when using last-mile delivery platforms like Instacart due to their high commission rates. Walmart has not disclosed how much the GoLocal service will cost merchants. A spokesperson from Walmart told Inc. that costs for the service would "be evaluated based on the specific needs of the client."
The initiative allows Walmart to add additional revenue streams to its existing delivery platform.
"The fascinating aspect of this is Walmart's recognition that access to supply capacity is an important asset," but one that needs to be used efficiently, says Simon Croom, professor of supply-chain management at University of San Diego. "Similar to Uber/Uber Eats, by adding more packages or revenue streams to existing routes and vehicles, Walmart can exploit economies of scale and scope," Croom adds.
There is currently a nationwide shortage of commercial delivery drivers, which has led to shipping delays and supply shortages. But relying on gig workers could pose another challenge as Walmart rolls out its new service business. Uber, Lyft, and other delivery platforms are facing their own driver shortage.