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New York (AP) — Wal-Mart will begin developing a delivery service on Tuesday that will use contract workers, self-driving cars and other means to deliver products from rival retailers directly to customers’ homes in just a few hours. Announced.
The country’s largest retailer has announced that it will send contract workers to stores to receive goods and deliver them to shoppers from the Spark delivery network launched in 2018. Over the past year, Wal-Mart has doubled Spark coverage to more than 500 cities across the country, giving it access to more than 20 million households.
Based in Bentonville, Arkansas, Wal-Mart aims to leverage relationships with communities, especially local businesses struggling to provide their own delivery services.
This strategy counters Wal-Mart’s distribution services operated by Uber, DoorDash and others. And that happens when Wal-Mart moves beyond its core retail business to expand its sources of profit and revenue. This reflects Amazon’s diversification movement with the Amazon Web Services cloud computing unit. This unit was originally built by an online giant and is now sold to other companies.
Last month, Wal-Mart began offering small businesses an e-commerce technology that they developed to allow shoppers to buy products online and receive them in stores. This is part of a partnership with technology provider Adobe.
According to Wal-Mart, delivery service Wal-Mart Golocal has already signed a number of unnamed contracts with domestic and small business customers. Refused to provide figures regarding investment or financial goals for the service. Delivery to other businesses will begin within a few months.
The move is happening as the pandemic deepens shoppers’ desire for faster delivery and puts more stress on small retailers who can’t live up to their expectations. Wal-Mart itself has relied on DoorDash and other crowdsourcing services, as well as its employees to serve its customers. However, it is also expanding the Spark platform, which previously offered no products other than Wal-Mart.
Shoppers who order everything from cupcakes to gadgets at local stores don’t know that Wal-Mart is involved. They purchase items on the local store’s website, and the store enables Walmart GoLocal shipping. Wal-Mart said it will not be delivered by Wal-Mart branded vehicles as it will be a white label service.
Jason Goldberg, Chief Strategy Officer of Publicis Communications, which is part of Publicis Groupe SA, said:
Goldberg said that the more Wal-Mart can make more deliveries, the lower the cost and the more profitable each delivery will be. You can also manage peak orders by working with different businesses that have different needs. Wal-Mart has an advantage in the competition of gig workers because it can offer more shifts to those seeking flexibility.
The only downside is that Wal-Mart could abandon its business to some of its local players, Goldberg said. For example, he said, customers may prefer to buy a birthday cake from a local bakery and deliver it within hours, rather than receiving it at Wal-Mart. But Goldberg said he believes that the benefits of having a broader distribution network outweigh these small competitive disadvantages.
Tom Ward, senior vice president of Wal-Mart’s US division, said in a phone call with reporters that service charges would be negotiated on a case-by-case basis. Delivery times can be as fast as a few hours up to 2 days. Wal-Mart said the drone could eventually be used for delivery.
John Furner, President and Chief Executive Officer of Wal-Mart’s US division, said:
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