In its never-ending battle with Amazon, and in a move that could have a ripple effect across the package delivery business, Walmart has started testing a program where store associates will delivery customer purchases ordered online.
In a blog post yesterday announcing the program, the company noted the opportunity to save shipping costs as a key program benefit.
“[We are] leveraging one of our greatest assets – our associates – to get online orders to customers’ doors. Why is that a big deal? Not only can this cut shipping costs and get packages to their final destinations faster and more efficiently, it creates a special win-win-win for customers, associates and the business,” the company said.
With 4,700 stores and more than 1 million associates, Walmart claims 90% of the U.S. population is within 10 miles of a Walmart. “Now imagine all the routes our associates drive to and from work and the houses they pass along the way. It’s easy to see why this test could be a game-changer,” the company said.
The program is being tested at two stores in New Jersey and one in northwest Arkansas. “Many orders are being delivered the next day, and associates love having the option to earn more cash while doing something that’s already part of their daily routine. An unexpected benefit is they’re finding quicker routes home thanks to the GPS built into our proprietary app.”
With e-commerce sales rising, and Walmart’s posting a 63% first-quarter jump thanks to other online initiatives, the question is what effect this program would have on the package delivery companies such as UPS and FedEX should it be expanded.
The likelihood is the impact will be great.
Did you know?
UPS deliveries to consumers increased 11.5% in the fourth quarter of 2016 and represented 55% of all UPS freight volume in the period, due mostly to e-commerce growth.
“Throughout the U.S. economy, there is a growing number of data points suggesting the economy continues to get slightly better. Some data points are simply less bad, but an increasing number of them are better, and even a few are becoming outright strong.”
- Donald Broughton in a report for Avondale Partners
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If Walmart is successful in using store associates as delivery drivers, the impact on other online retailers could be immense, forcing them to offer low-priced or even free shipping to keep business. The ripple effect will be felt throughout the freight delivery business.
Hammer down everyone!