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Walmart launched a new service in August called GoLocal to deliver goods to customers on the same or next day from other companies’ websites. Home Depot is the service’s first customer, the two companies said on Wednesday.
Walmart is looking for ways to grow beyond its core retail business and create new revenue streams in areas such as advertising and fulfillment services for merchants. The GoLocal service is part of this strategy.
The retailer is betting that it can use its large footprint in the United States and logistics expertise to offer fast deliveries, especially in suburban and rural markets which it says are underserved by parcel carriers and others, such as than Amazon (AMZN) and Shipt, which belongs to Target (TGT).
Walmart uses independent contract drivers on its in-house Spark platform to deliver items from Home Depot and other merchants. The entire Home Depot catalog will not be available for delivery through the service – just tools, paint, fasteners and other supplies that “slip easily into a car,” according to a press release. The Home Depot delivery option will be available to customers in Texas, New Mexico and Arkansas in the coming weeks, with plans to expand to other areas by the end of the year. ‘year.
Stephanie Smith, senior vice president of supply chain for The Home Depot, said in the announcement that the merger with Walmart “brings us even closer to our goal” of offering same day or next day delivery to 90% of the United States. population. Home Depot currently offers these deliveries as part of a partnership with the Roadie same-day delivery platform.
For Walmart, the deal is a “huge victory,” Scott Mushkin, CEO of retail consultancy R5 Capital, said in an email. Home Depot, one of the nation’s largest retailers, in partnership with Walmart “suggests that Walmart’s solution resonates in the market,” Mushkin said. He predicted this will lead to other businesses signing up for the delivery service.
Walmart U.S. CEO John Furner told an investor conference last month that the consolidation of online orders from Walmart and other companies “cuts delivery costs” and keeps drivers on the job. on the Spark platform by giving them extra work outside of Walmart deliveries alone. Until now, Walmart has relied on Spark drivers to deliver online orders from its stores to around 500 cities.
Last mile delivery is usually a money-losing business, and Walmart will need to muster a lot of orders to make deliveries profitable, some retail analysts have warned. The company also faces fierce competition in the logistics space from companies expanding same-day shipping options. UPS (UPS) last month announced the acquisition of Roadie.
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