Published: Sat, June 03, 2017
Tech | By Constance Martin

Walmart testing delivery of online orders by store employees

Walmart testing delivery of online orders by store employees

The world's largest retailer is testing a home delivery program that has associates dropping off online orders to customers on their way home after work.

The idea, now tested in three stores - two in New Jersey and one in northwest Arkansas, is a win-win for customers and the $241 billion company, Walmart's USA e-commerce president and CEO Mark Lore wrote in a blog post Thursday.

The "associate delivery" program would use Walmart's 4,700 USA stores and roughly 1.2 million employees to speed delivery and cut costs, the company said Thursday.

In the U.S., Walmart's 4,700 stores and 1 million associates are within 10 miles of 90 percent of the U.S. population, the company said. Considering this, Lore invites us to "imagine all the routes our associates drive to and from work and the houses they pass along the way". "This test could be a game-changer".

Walmart also recently rolled out a new discount to customers who ship purchases to one of Walmart's more than 4,700 USA stores instead of to a home or elsewhere. Those who decide to opt in will be able to set preferences, such as the number of packages they want to deliver, the weight and size limits of the packages, the days they could make deliveries, and so on.

The software also allocate packages based on minimizing the collective distance they need to travel off of their commute to make a delivery.

Walmart's digital strategy relies on leveraging its enormous investments in infrastructure and employees. The idea is aimed at cutting delivery costs and helping the employees to improve their income.

The company calls this "Associate Delivery" and it already started testing this concept with some orders. The company - long the country's largest retailer - has taken aggressive steps in the past year, beginning with its $3.3 billion purchase of Jet.com to compete with Amazon.com, which now accounts for about 33 percent of the country's online sales.

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The company said it planned to widen the pilot scheme in partnership with Starship Technologies, who make the robots that have also been used by takeaway company Just Eat.

In Walmart's case, workers making deliveries will be paid their same wages during deliveries - which might be less than on competitors' services, or when driving Uber - but they also have the perk of being an employee, not a contractor.

According to Lore, the program is a "special win-win-win for customers, associates and the business", and there's a strong chance he's right.

Lore has overseen Wal-Mart's acquisitions of three online retailers and made other e-commerce changes. Under the new plan, e-commerce goods would be shipped by Walmart's fleet of trucks to stores, then the last mile by employees.

The program is being tested at a trio of stores in New Jersey and Arkansas where it often achieves next-day delivery. In January, the company lowered its minimum threshold for free two-day delivery to $35, which resulted in Wal-Mart's biggest competitor Amazon lowering its own minimum.

Employees will receive extra pay for the voluntary program as well as overtime pay if necessary to fulfill the deliveries, said a Walmart spokesperson on Thursday.

In addition, Walmart has done a lot of work on its backend order management system to make this delivery program viable for both Jet.com and Walmart.com online orders.

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