🛒 What Are Walmart’s Last Mile Delivery Plans?

Nordstrom's disappointment; South Korean curbs on Apple, Google.

Hey Global Investor! Here’s what you need to know before the US markets open.

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🛒 Walmart: Last Mile At Last?

World’s largest retailer Walmart Inc. (WMT), announced the launch of its last-mile delivery service called GoLocal yesterday. This is the culmination of Walmart’s five-year-long journey to build the ability to deliver goods to customers. (Tweet This)

The Long Road To GoLocal

When Walmart had acquired the e-commerce startup Jet.com back in 2016 for $3.3B in cash, the retailer had hoped to attract millennials to its fold. It would also allow Walmart to stand up to Amazon’s onslaught in the delivery business.

Last year, this acquisition was consigned to the sands of time as Walmart acknowledged the plans weren’t really going anywhere. This misfired acquisition joined other costly bets by Walmart, such as ModCloth, a women’s apparel startup which the retail giant also abandoned.

Even so, Walmart took the positives from these experiences: it expanded the curbside pickup service beyond groceries to include apparel and home decor and launched its grocery delivery service in March 2018; in February 2020, Walmart started allowing sellers to leverage its supply chain capabilities; in April 2020, it launched Express Delivery, a store-to-door service that delivered to customer homes within two hours.

All these efforts bore fruit, and Walmart’s e-commerce business grew 37% Y-o-Y in 2019. In 2020, even as the world grappled with the pandemic, the e-commerce division registered a 69% growth as people chose to order online from close to 5K Walmart stores in the US.

To make further inroads in the online business, Walmart is sharpening its omnichannel strategy. Customers are now able to buy goods how, when, and where they want them. It is roping in local retailers to expand its customer reach further. The GoLocal effort is part of the same strategy.

Loading Up On Technology And Network

GoLocal will be a “white-label service,” and customers can choose anywhere between the two-hour delivery and the two-day delivery option. Delivery personnel from its “Spark” delivery network will pick up items from the stores and deliver them to shoppers. Today, the Spark network is present in over 500 cities.

Walmart expects to have this service fully activated by the end of the year. Self-driving vehicles and drones are expected to be part of the delivery fleet, including gig workers and third-party delivery companies.

This past April, Walmart invested in autonomous vehicle technology company Cruise, which is majority-owned by General Motors. Being involved with Cruise will help Walmart create a fast, low-cost and scalable home-delivery logistics network. It also made a “strategic investment” in DroneUp, a drone service provider for last-mile delivery solutions.

Coming ahead of the busy holiday season, this announcement is only expected to provide further fillip to the fast-growing e-commerce business for Walmart. Currently, Walmart partners with FedEx for its own online deliveries, but it is unclear if this engagement will also be part of GoLocal.

On the stock front, it has been a ho-hum year thus far for shareholders, with the stock barely rising 1.6% YTD. Be that as it may, Walmart is leaving no stone unturned as it works hard to ensure it remains the “Great Wal of America” and a substantial player in the e-commerce space.

Market Reaction
WMT ended at $148.90, down 1.03%.

Company Snapshot 📈

WMT $148.90 -1.55 (1.03%)

Analyst Ratings (36 Analysts) BUY 75% HOLD 19% SELL 6%

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