Walmart announced Tuesday the launch of a delivery service called GoLocal, which will move goods from other local retailers to consumers.
The company said it expects delivery to begin in late 2021 and that the delivery fleet will include newer technologies like self-driving vehicles and drones.
“It’s about bringing the skills we at Walmart have focused on building and connecting for our own customers to life for local and national businesses,” said Tom Ward, senior vice president of Last Mile at Walmart CNBC.
Walmart said GoLocal will be a white label service, which means deliveries will not be made on Walmart-branded vehicles. The company said it will offer two-hour shipping at competitive prices, as well as a two-day delivery option. Deliveries are handled by a combination of staff, gig staff, and sometimes other delivery companies.
Walmart is currently working with FedEx for online parcel delivery. The company wouldn’t say if FedEx is being used for GoLocal.
However, Ward said the company will find innovative delivery partners including Cruise, a self-driving electric vehicle startup that the retailer invested in last year, as well as Waymo and Nuro. Delivery of drones will also be a focus, with partners like DroneUP, another company Walmart invested in last year, as well as ZipLine and FlyTrex.
“We’re excited to have all these different disruptive technologies as we scale up that bring the final mile together at Walmart,” said Ward.
Walmart has spent the past five years building its ability to deliver goods to customers. In August 2016, it acquired the e-commerce start-up Jet.com for $ 3.3 billion. In March 2018, Walmart launched its grocery delivery service, which handles orders from Walmart stores. The company launched Walmart Fulfillment Services in February 2020 to compete with the growth of marketplace-centric websites like Amazon and Shopify.
The company shut down Jet.com in May 2020, but CEO Doug McMillon credited the acquisition with helping Walmart expand its delivery network.
Amazon launched a similar service called Amazon Shipping in 2018, which was supposed to compete with UPS and FedEx, but ended the service in June 2020.
David Vernon, senior transportation analyst at Bernstein, said a retailer’s local delivery service was unlikely to have a significant impact on FedEx and UPS revenues.
“The local delivery market has 230,000 companies competing in every city across America,” Vernon told CNBC. “There are two national packet networks. They have some overlap; business is shifting towards part of this local business. But in the long run, it’s not exactly the same.”
GoLocal already has contracts with a number of national retail customers, according to Walmart, and will begin accepting applications for new partners starting Tuesday.
