In another effort to improve its logistics operations and further establish itself as an e-Commerce powerhouse, Walmart has acquired last-mile delivery service Parcel for an undisclosed sum. Parcel will serve as another outlet for both Walmart and Jet.com to deliver general merchandise as well as fresh and frozen groceries.
Parcel operates in New York City, handling scheduled and same-day delivery services for online retailers such as Walmart subsidiary Bonobos and meal kit companies including Chef’d and Martha Stewart’s Martha & Marley Spoon.
Marc Lore, President and CEO of Walmart eCommerce U.S., announced in late September that Walmart would introduce same-day delivery in the New York City area. Jet.com already has run pilot tests of free same-day delivery there.
Other retailers have begun to ramp up their own same-day delivery capabilities as consumers demand more timely fulfillment options. Macy’s, Best Buy and PetSmart have expanded their partnership with third-party logistics provider Deliv to bring the service to more cities, while Target recently took the Walmart route — acquiring a partner provider to jumpstart a pilot program in New York City.
While Walmart and Jet.com already had offered free two-day shipping for orders of $35 or more, the companies have shied away from large scale same-day delivery rollouts. But with other major brands signaling their willingness to either acquire a last-mile delivery service or partner with one, same-day delivery may be gaining new momentum. In a blog post, Nate Faust, Senior VP of Walmart U.S. eCommerce Supply Chain, noted that the partnership will help the company continue testing ways to offer fast delivery while lowering operating costs.
Same-Day Delivery Is The Latest Service In Walmart’s Convenience Kick
In an effort to close its wide e-Commerce gap with Amazon, Walmart also has pressured the rest of the industry with additional omnichannel services, including grocery curbside pickup, in-store order retrieval and in-store order pickup discounts. And recently, Walmart has tested a service to stock groceries directly in customers’ refrigerators. If these innovation strategies pay off for Walmart, competing retailers won’t be able to afford lagging behind with similar services.
Although Walmart and Parcel both declined to reveal the acquisition price — only noting that it was “smaller than previous acquisitions we’ve made this year,” which have included Bonobos, Moosejaw, ModCloth and ShoeBuy — Recode has reported that the deal is for less than $10 million.
Parcel uses routing algorithms, a fleet of leased vehicles and its employees to sort, load and deliver packages to customers. The company also provides services such as scheduled evening delivery and custom text message notification.