retail news in context, analysis with attitude

The Wall Street Journal reports that Walmart plans to launch same-day delivery of groceries in New York City, using its Jet division, and offer grocery delivery in 100 cities before the end of the year - “adopting a costly model it previously resisted as Amazon, Kroger and Target invest in similar services.”

According to the story, “Under the new program, online grocery orders will be packed in a Walmart store by company workers and then handed off to a delivery company or startup that uses contract workers to bring orders to homes, said a Walmart spokesman.” Uber will be one of the initial delivery services used by Walmart, with others to be added down the road.

The story notes that “Jet already delivers food to homes in some cities, but orders arrive via a carrier like FedEx , usually within a few days. Jet aims to expand fast grocery delivery to around 10 large cities where Walmart hasn’t built a store presence like San Francisco.”

The grocery delivery space has gotten increasingly crowded, with Amazon, Kroger, Costco, Target, Aldi and other retailers vying to develop differentiated offerings, though almost all of them have decided to use various delivery services - sometimes the same delivery services - to serve their customers. Target acquired Shipt last year for $550 million to facilitate its service.

The Journal writes that “Walmart’s grocery delivery will cost $9.95 and have a $30 minimum order. Product prices will be the same as in stores, the company said.”
KC's View:
I know it is easier and faster to simply get other people to handle the deliveries, even if it has to be different entities in different cities.

But it continues to be my view that easier and cheaper isn’t always the best and most sustainable way to move forward if a company really wants to differentiate.

And I continue to believe that at some point in the not-too-distant future, we’re going to see Walmart make a move to buy one of these services.