Walmart Testing Associate Delivery Program

The Focused Investors LLC Has $1437 Million Position in Wal-Mart Stores Inc (WMT)

The Focused Investors LLC Has $1437 Million Position in Wal-Mart Stores Inc (WMT)

Heating up its rivalry with Amazon yet again - this week's edition - Walmart is testing the use of store associates to deliver online orders to customers' homes.

'It just makes sense: We already have trucks moving orders from fulfillment centers to stores for pickup, ' Marc Lore, CEO of Walmart's USA online operations, wrote on the company website.

The test is now available in two New Jersey stores, and one in northwest Arkansas.

"Walmart is uniquely qualified, uniquely positioned, to be able to offer this", he said, adding that 90 percent of Americans live within 10 miles of a Walmart store. "Now imagine all the routes our associates drive to and from work and the houses they pass along the way".

Lore called it a game-changer in Wal-Mart's ability to use its stores to move ahead in e-commerce.

Walmart also recently rolled out a new discount to customers who ship purchases to one of Walmart's more than 4,700 United States stores instead of to a home or elsewhere. The retailer assigns deliveries to associates in a way created to minimize the distance they collectively need to travel.

Walmart (wmt) has lined up new soldiers in the delivery wars with Amazon.com (amzn): Its own store workers. The company noted that many orders are being delivered the next day.

The Walmart e-commerce testing program is designed in a way that can cut out the costs of the last mile distribution. Expect Walmart to expand it rapidly, and other retailers to watch closely and follow suit.

The home delivery test also serves shoppers of Jet.com, an e-commerce company founded by Lore and acquired by Walmart previous year.

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The decision, however, could prove controversial for a company that has been criticized in the past for its labor practices, said Krista Garcia, a retail analyst with eMarketer. It recently began offering discounts on roughly 10,000 items that are online exclusives if shoppers are willing to pick them up at a local store.

"You can imagine hundreds of associates who live all around in different neighborhoods around the Wal-Mart", said Marc Lore, who is the company's US e-commerce chief.

Crucially, those orders have typically been for next-day delivery, said Walmart spokesman Ravi Jariwala.

At Walmart, Lore has tapped Walmart's massive brick-and-mortar infrastructure to further speed up shipping times.

At the meeting, McMillon revealed some more of the futuristic inventions Walmart is beginning to test at its stores, and it's nearly daunting how progressive some of them are.

In February, the retailer launched free two-day shipping for all orders over $35 - a direct challenge to Amazon's $99 Prime membership, which offers free two-day shipping on all orders. That service is a result of the company's acquisition a year ago of online retailer Jet.com.

According to the reports on Reuters, the store workers deliver the packages that are ordered on the Walmart website after finishing their shifts.

Still, the final delivery step to a customer's home - what the industry refers to as the "last mile" - 'makes up the lion's share of fulfillment costs, ' Jariwala said.

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