The last-mile delivery war has just got more intense. Wal-Mart is trying to catch up with Amazon’s 2-hour delivery service in an innovative way: it has recently inked a deal with ride-hailing companies Lyft and Uber to deliver groceries to its customers’ doorsteps.
The new project will reportedly be discussed by the retailer with its major shareholders and the two rival companies on Friday. The last-mile delivery service will be launched later this month in Phoenix and Denver.
But Wal-Mart is not Amazon’s only rival in the speedy delivery race. Other companies including the U.S. Postal Service, Uber, DoorDash Inc, and Instacart Inc are currently running similar projects.
The said companies and startups seek partnerships with retailers and restaurant chains to deliver goods to people’s homes in a speedy manner. Wal-Mart is already testing a last-mile delivery service in Miami where it has teamed up with Deliv Inc which now offers similar services to other retailers.
Under the latest grocery delivery project, Wal-Mart shoppers can buy groceries directly from the retailer’s website. After they placed the order, Wal-Mart workers process it and summon a nearby Uber or Lyft driver for delivery. The service will cost between $7 and $10, depending on the raid-hailing firm’s fees and distance.
Most importantly, Wal-Mart will charge shoppers for the same-day delivery service not the drivers. The company declined to say why it has picked two rival companies for the pilot program.
A spokesperson said that the retailer plans to “start small” at first and gain more customer feedback to improve the service. The company strongly believes that a delivery pilot program is one of the best ways to learn what people want and how they want it done.
Wal-Mart has already made some heavy investments to stymie Amazon’s online competition. It plans to invest $2 billion for that purpose alone over the next two years. Amazon recently entered the grocery delivery business with its AmazonFresh service.
The big box retailer believes that it has a competitive edge over companies like Amazon due to its network of 4,600 stores across the U.S. Wal-Mart can turn these locations into online-order-pickup facilities in no time and cut costs. But so far, Wal-Mart has managed to offer only a 2-day delivery service to its online shoppers.
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