Walmart is expanding its Uber-powered grocery delivery pilot to two more markets — Orlando and Dallas. Tampa and Phoenix were the first two locations served in the initial pilot. As part of the test, consumers can shop online for grocery items, then opt to have an Uber driver deliver them for an additional $9.95 fee.
The retail giant has experimented with grocery delivery since 2014, starting with tests in Denver and San Jose, Calif. using its own service and trucks. The Uber tests began in June 2016 in Phoenix, then expanded to Tampa in March 2017. In both markets, Walmart offers grocery delivery at five local stores per market.
Walmart is pulling out all the stops to improve its grocery offering, which recently saw its largest quarterly growth in five years. But the move to expand its delivery test with Uber means the retailer is seeking success with the last mile beyond its own delivery infrastructure. With today’s grocers often confounded by trying to figure out a successful blueprint for delivery (or even in-store pickup), the idea of outsourcing fulfillment services to an already active set of drivers appears to be a very convenient alternative.
Advertisement
Of course, revenue and how it is divided will remain an issue that retailers will have to take into account when building out these types of partnerships. Walmart hasn’t indicated how the $9.95 delivery fee is being split with Uber, so retailers are going to have to measure how much they would save on a ridesharing partnership compared to using their own trucks.
With companies like Cargo now banking on Uber and Lyft drivers to provide services outside of basic transportation, it seems that grocery delivery in small doses could be a smart move in markets where drivers are abundant. If anything, giving customers the choice of having an Uber driver deliver their groceries shows that Walmart is willing to increase the number of options a consumer has on their journey — which counts as a major win in today’s retail environment.
