Is Walmart the next retail dinosaur to fail with the dominance of Amazon's shipments?

The announcement of the end of the Deliv and Walmart delivery start-up partnership could potentially be the canary of the coal mine signaling an imminent transfer of power from Walmart to Amazon on the retail market in America. For connoisseurs, a clandestine but very real war is currently underway between the two titans of the American retail trade, with the potential to fundamentally reorganize the way Americans – and ultimately the rest of the world – make their purchases.

After leaving behind a series of disrupted business models and conquering the markets, Amazon is currently battling a battle for the supremacy of US retail with Walmart, which is still the largest retailer in the world. Until now, Walmart has managed to avoid the fate of retailers like Toys "R" Us and Sears by blurring the links between its online and offline retail offering in response to the acquisition of Whole. Foods by Amazon in $ 13.7 billion in 2017. How important is a withdrawal by Deliv for Walmart and what could it mean for Amazon?

Delivery of last mile shopping is the key

From a business point of view, Walmart and Amazon are not so different. They both have the same highly efficient supply chains and just-in-time inventory management systems. They both offer their customers a wide variety of stocks and brands at similar prices. The difference between the two has always been that even though Amazon places outdated importance on delivering products to customers' homes the same day, Walmart has retained its reputation as a supermarket where customers physically buy their items and take them away instantly.

The acquisition of Amazon Whole Foods, however, changed all that, as the company combined an extremely efficient delivery infrastructure with the inventory of a reputable premium supermarket brand. Unlike Walmart, Amazon does not depend on a fleet of trucks whose drivers work at defined times. A true Internet start-up style, the company has always demonstrated its determination to deliver its goods to its customers in as little as two hours by any means possible, even evoking the idea of ​​delivery drones.

In order to keep up with Amazon's blatant market share, Walmart signed the agreement in 2017 with Deliv, a kind of Uber start-up (but for delivery) offering independent drivers to perform deliveries at short notice. It was supposed to be the deal that would catapult Walmart from a threatened legacy retailer to a technology-driven retail platform of the 21st century.

Instead, according to Deliv sources quoted by Reuters, Deliv's drivers quickly realized that Walmart's organizational culture was simply not listening for the quick response and quick turnaround required to play in this. field. According to sources, drivers often had to wait up to 40 minutes to pick up their order after they arrived at the supermarket. In addition, Walmart's policy is to prioritize physical customers over those who have placed orders over the Internet, which has naturally caused problems.

In comparison, Whole Foods continues to deliver on its promise of same-day delivery, the implicit point being that an increased adoption of the Internet for grocery shopping experiences will favor Amazon over Walmart. Walmart is apparently unable to redefine itself as a serious alternative to Amazon

"Amazon Effect" coming soon for Walmart?

Although the rumors about Walmart's death are clearly exaggerated at this stage, it should be noted, however, that if this vulnerability is not corrected and consumer habits persist, it is not inconceivable that we would be at the beginning of the end. for the most famous retailer in America. The importance of significantly improving its online shopping offer will not be lost for Walmart after a series of studies that have shown the relationship between e-commerce and the closure of several retail stores.

Walmart has already gone through similar partnerships to try to keep pace with Whole Foods. These include failed deals with mobile phone services, Uber and Lyft, partnerships with hundreds of local distribution companies and even an attempt to create its own internal micro-distribution system.

The same-day war of deliveries between Walmart and Amazon may have come up against a brick wall after Uber and Lyft's earlier bankruptcy as delivery partners.

Of course, at the moment, the retailer is taking good care of its same day delivery issues. In response to media inquiries, Molly Blakeman, a spokesperson for Walmart, issued a concise statement that reads in part as follows:

As with any driver, the goal is to learn. And we finally concluded with Deliv that if their platform is a good delivery option, it was not the best solution for our program at the moment.

Responding to insinuations that the partnership did not work because of Walmart's low demand and low order processing rates, Blakeman denied this assertion, saying the termination was purely mutual, without providing further explanation.

As mentioned before, Walmart remains the best retail dog in the world, and it would be clearly stupid to write it for the moment. However, if society does not immediately recognize the need for change, it is quite possible that we would once talk about Walmart in the past, in a world dominated exclusively by Jeff Bezos. a the South Park.