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Walmart to deliver goods for other merchants

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Walmart is planning to share its delivery network with other retailers in a new business that will open another competitive front between the world’s largest big-box store chain and the online retailer Amazon.

The third-party logistics service, called Walmart GoLocal, was set to launch on Tuesday. Walmart billed it as a “white label” delivery provider for local and national retailers such as bakeries and auto parts stores.

Merchants that sign up for GoLocal will use Walmart’s delivery platform to fulfil orders made through their own websites, according to Tom Ward, senior vice-president of last mile at Walmart US. Walmart GoLocal will pick up merchandise from retailers’ facilities to make deliveries.

The move comes as traditional retailers search for new streams of revenue. An increasing number of consumers are ordering goods online and expect rapid delivery to their doorstep.

It will also heat up competition with Amazon, whose fulfilment service delivers goods ordered from other websites. In May Amazon invited sellers to join a waiting list for a pilot programme that would package their orders in unbranded boxes. Amazon and Walmart warehouses also store third-party merchandise that is sold through their respective websites.

Walmart said merchants using GoLocal would be able to keep their brands front and centre in the eyes of their customers. Delivery vehicles managed by Walmart might arrive adorned with a merchant’s logo.

Ward said the service would be “customisable for merchants of all sizes and categories so they can focus on doing what they do best, leaving delivery speed and efficiency to us”.

In July Walmart announced a partnership to integrate its marketplace, fulfilment and pick-up technologies with the Adobe Commerce platform, part of a broader effort by the retailer to sell its technology to other businesses.

Jefferies analyst Stephanie Wissink said in a recent note that Walmart’s initiatives, from expanding its online marketplace to its new delivery options, should fuel “continued robust ecommerce growth”, gaining a bigger share of customer spending.

Walmart’s US ecommerce sales have more than doubled in the past two years, based on the company’s second-quarter results. Earlier this year, Walmart said it was targeting $14bn in capital investments in fiscal 2022, some of which would be used on supply chain and automation improvements. The company forecast global ecommerce sales to reach $100bn in the next couple of years.

“We’re trying to build a model where we’re completely indifferent, top and bottom line, as it relates to how people shop,” Walmart chief executive Doug McMillon said on an earnings call last week.

At rival Target, where workers pack online orders inside the company’s stores, same-day delivery sales through its Shipt service grew 20 per cent in the second quarter, on top of more than 60 per cent growth in the same period last year.

Target said customers chose some form of same-day fulfilment for more than half of all digital sales, reflecting a surge in demand for kerbside pick-up fuelled by the coronavirus pandemic.

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