By Nathaniel Meyersohn, CNN Business
The next time you order this waffle iron or rice cooker, it might be delivered to you by Walmart, even if it wasn’t where you bought it.
The company said on Tuesday it was launching a new service that delivers products sold by other companies to customers. The service will be ready in time for the holiday shopping season, the busiest time of year for retailers.
Walmart said it has delivery deals with national and local companies, but did not say which ones. He also did not disclose the fees he would charge companies for deliveries, but said they would be “competitively priced.”
Walmart is looking for ways to grow beyond its core retail business and create new revenue streams in areas such as advertising, fulfillment services for merchants in its own online marketplace and financial technology. Walmart’s new delivery service, called GoLocal, is the last part of its strategy.
Walmart hopes to provide businesses with a new option for last mile delivery, the last leg of an online order’s journey 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 it can use its large footprint in the United States and logistics expertise to deliver deliveries, especially in suburban and rural markets which it says are underserved by parcel carriers and other platforms. forms, said Tom Ward, senior vice president for the last mile at Walmart, during a call with reporters Monday.
Indeed, retail experts say the new service can serve businesses struggling with high delivery costs or fill gaps in coverage left by vendors like UPS and FedEx.
“Last mile and home delivery space has been an expensive offering for almost all retailers,” said Tyler Higgins, head of retail practices at global management consulting firm AArete, in an e- mail. “The need for improved and efficient delivery is increasing and there is still a gap in the market that [package carriers] can not meet.
But competition from Walmart in the logistics space will be stiff as competitors such as Target-owned Shipt, DoorDash and Amazon introduce more same-day shipping options.
Last mile delivery is typically a money-losing business, and Walmart will need to muster a lot of orders to make deliveries profitable, analysts say.
It might be difficult to pick up orders from several different merchants at once, rather than delivering them from a central location, said Daniel McCarthy, a professor at Emory University’s Goizueta School of Business who studies corporations. online delivery.
“A big open question will be that Walmart will make the economy work,” McCarthy said. “It will be logistically heavier and therefore expensive to manage many small fish instead of a few whales. “
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