March 14, 2018 5:21 pm
In October, Costco introduced a two-day delivery option for dry groceries and a same-day alternative for fresh goods through Instacart, a delivery service. Target said in December that it would purchase the online same-day delivery service Shipt for $550 million in cash.
Earlier this month, Amazon said it would offer same-day delivery of groceries from Whole Foods in six cities. On Monday, Kroger followed suit with an announcement that it would expand the number of cities eligible for home delivery of groceries through Instacart.
But a grocery delivery service could be difficult to implement and market to shoppers, experts said.
“There is a lot of experimenting going on as everyone tries to figure out that last-mile delivery — it’s a tough economic equation to make work,” said Mike Knemeyer, a professor of logistics at Ohio State University. “But if you can, you’ll have a big head start on the others, and you’ll end up making money not just in groceries but on all of the things that you sell.”
Walmart’s announcement follows several substantial investments by the company into its growing suite of online offerings, including a partnership with Google to sell Walmart products on Google Express, and a $3.3 billion acquisition of Jet.com, a bulk online retailer. But success has sometimes been fickle — Walmart’s online sales increased 23 percent in its most recent quarter, less than half the rate of growth in each of the prior three quarters.
Walmart also reiterated on Wednesday that it will expand its curbside grocery pickup service, which allows customers to order food online and collect it at stores, to another 1,000 locations this year from the 1,200 locations where it is already offered. And last month, the company said it would offer members of its Sam’s Club chain free shipping of online orders for an annual fee of $100.
Door-to-door delivery, however, requires a level of logistical planning that has stumped many retailers.
Walmart’s service requires customers to visit the company’s website or grocery app to place orders. The chain will then send one of its 18,000 personal shoppers to collect the selected items.
Each of those employees — along with the thousands more that Walmart said it would add this year — undergoes a three-week training program that teaches them to pick out the best produce and meats.
After the order is prepared in the store, a delivery service like Uber would whisk it away to the customer.
Offering expanded online grocery delivery is an “informed gamble” for Walmart, Mr. Knemeyer said, one that will likely serve up side benefits such as data collection and inroads into the affluent urban consumer base.Business
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This post was written by All Charts News