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Target, Walmart Make Investments to Enhance Last Mile Delivery

Walmart Cruise
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Both Target and Walmart have announced new investments in last mile delivery technologies, highlighting the growing importance of fulfillment in the post-COVID environment.

Target is testing out a new localized delivery system via a pair-up of its new sortation center in Minnesota and its Shipt delivery service that it hopes will speed up delivery times. Meanwhile, Walmart has taken a financial stake in autonomous delivery startup Cruise, following a pilot program with the company in Arizona last year.

Target Aims to Speed Up Delivery by Localizing Fulfillment

Last year, Target opened a new sortation center in Minneapolis,  designed to ship packages from stores more efficiently by using technology the retailer had previously acquired from Grand Junction and Deliv. Now, Target is bringing its Shipt delivery service into the mix, in a new trial that aims to speed up how quickly those sorted packages reach consumers.

“For years, Target has put our stores at the center of how we serve our guests,” said John Mulligan, COO of Target in a statement. “Our new sortation center builds on that model by helping us ship online orders with greater speed and lower costs, while making room for future growth. By adding Shipt to that operation, we’re now testing how we can reach guests even faster with efficient local deliveries.”

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Here’s how it will work:

  1. When an online order is placed, in-store teams pack those orders from the store assortment.
  2. The sortation center collects those packages from stores across the area, bringing them to a central location for delivery by the company’s multiple carrier partners.
  3. Proprietary technology at the sortation center determines the most efficient routing and delivery method for each order, sorting packages into batches by neighborhood.
  4. New to the mix is the introduction of Shipt drivers as a carrier option, who can pick up batches and deliver them locally.

Walmart Looks to Combat Climate Change, Improve Delivery with Electric Self-Driving Cars

Walmart has joined a number of institutional investors, including GM, Honda and Microsoft, in the latest funding round for autonomous vehicle company Cruise. With the new funding, Cruise has now raised $2.75 billion in capital, according to the company.

Walmart said in a statement that the goal behind the investment was developing “a last-mile delivery ecosystem that’s fast, low-cost and scalable.”

The retailer first began working with Cruise in November 2020 to pilot self-driving delivery in Scottsdale, Ariz.

“As delivery has become a staple in our customers’ lives, we’re focused on growing our last mile ecosystem in a way that’s beneficial for everyone — customers, business and the planet,” said the company in a statement about the Cruise investment. “With their all-electric fleet powered by 100% renewable energy, Cruise is a natural partner as we work to take collective action on climate change.”

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