Walmart goes big into online grocery delivery, challenging Amazon

Cornelia Mascio
Marzo 14, 2018

Walmart says it will continue to use of ride-hailing services like Uber to deliver the goods to shoppers' homes as it expands its service. There has been plenty of activity from retailers like Walmart and others in the grocery delivery space to support it. Walmart has focused on improving the freshness and quality of its assortment the past several years, while aggressively lowering prices on items and rolling out convenience-based services like its online grocery pickup for customers.

The announcement comes just weeks after Amazon added two cities to its new Amazon Prime grocery delivery service, bringing the total number up to six. Those stores will be the first to introduce the program, Tom Ward, the vice president of Walmart's digital operations in the US, said on a call with members of the media.

Target acquired Shipt, a grocery delivery service, for $550 million late past year and is offering same-day delivery on groceries, essentials and other products in some cities with plans for more.

Walmart's online business had been a bright spot for the chain, but it stumbled during the holiday season.

Walmart will compete against Amazon's Prime Now service, which offers free two-hour delivery to members of its loyalty program. Other retailers such as Kroger and Target have been partnering with third-party providers such as Instacart, Deliv and Shipt.

Ward disagreed that Walmart's move was related to Amazon, saying: "This is our response to honestly what our customers have been looking for". Select alcohol is also available for delivery to customers. No subscription is required.

With greater control over how its produce is grown, Walmart could vertically-integrate, manage crop yields more effectively, and draw shoppers with transparency and sustainability.

For Walmart's new service, each delivery will cost customers $9.95 and orders must be a minimum of $30 each.

Walmart is building on its online grocery pickup program that uses personal shoppers to pick items and then take them to shoppers' cars parked at the curb.

"Walmart must expand its delivery capabilities if it is to remain a contender against Amazon and lead the pack against all the rest", Spieckerman said.

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