Wal-Mart Stores Inc. (NYSE: WMT) wants into a new business. Order groceries online and have them delivered. At least it is not something Amazon.com Inc. (NASDAQ: AMZN) does, at least for now.
Wal-Mart has set a partnership with Uber and Lyft to deliver these groceries. It is also a sign that the ride companies continue to diversity beyond their core business, as one means to justify their sky-high valuations.
You can see this in our rapid expansion of online grocery pickup across the country, as well as the grocery home delivery service offered in San Jose, California and Denver, Colorado. At our annual Shareholders Meeting, our CEO Doug McMillon will announce our newest pilot; a last-mile delivery test through services like Uber, Lyft and Deliv. Walmart will start with tests of grocery delivery through Uber and Lyft, which we expect to start within the next two weeks in Denver and one other market. This is in addition to a very quiet Sam’s Club pilot that started in March with Deliv involving delivery of general merchandise and grocery for business members in Miami.
Here’s how it works for Walmart grocery customers: A customer in one of the test locations places their grocery order online and selects a delivery window. Our personal shoppers, highly-trained Walmart associates, will carefully select and prepare their order. Then, our team may request a driver from one of these services to come to the store, pick up the customer’s order, and take it directly to the customer’s location. It’s all seamless to the customer. They pay us our normal $7-10 delivery charge online, and make no payment to the driver. We’ll also let them know their order is being delivered by a driver from Uber or Lyft.
So much for the “very quiet” Sam’s Club service. And the ability to tip drivers.
The service is not likely to every get large. Its success would assume that people do not want to go to a grocery store, pick out their own items and make sure they are fresh. Or to benefit from grocery delivery that many stores already offer.
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