After dealing in all other merchandise, it seems like Walmart is ready to offer its food delivery service too. Here’s a detailed look.
With its wholesale and retail business, Walmart is one of the most popular stores not only in the US but also around the globe. Walmart has an assortment of retail products and merchandise at comparatively lower prices.
However, the company has now entered the food delivery sphere to service customers, create employment, generate more revenue, and give the competition a run for their money.
An Overview of Walmart
Walmart is undoubtedly one of the most popular stores in the world, especially in the US.
It operates in several business segments, such as Walmart International, Sam’s Club, and Walmart US. The US segment provides a wide range of consumer products and operates under different brands, including Walmart Neighborhood, Wal-Mart, and Walmart.
Meanwhile, the international business segment of Walmart manages hypermarkets, supermarkets, supercenters, cash and carry, and warehouse clubs.
Although its headquarters are in Bentonville, Arkansas, Walmart has made its way to international markets, where it is also a household name.
On its website, the company claims that it serves more than 220 million customers every week in its 10,500 stores operating in 24 countries under 48 banners and e-commerce sites.
In 2021, Walmart generated a revenue of $559 billion and had 2.3 million associates globally. The company focuses on employment opportunities, corporate philanthropy, and sustainability. Its mission is to create opportunities for employment while bringing value to consumers around the world.
That’s most probably one of the reasons Walmart is dabbling into food delivery services. In doing so, the company is bound to give existing services, such as UberEats and GrubHub, tough competition.
How Adding a Food Delivery Service Gives Walmart More Exposure
In August 2021, Walmart announced that it plans to commercialize the native delivery platform, helping small and medium-sized businesses deliver products to their customers through autonomous vehicles, drones, and contract workers.
The company plans to make this service available to New York residents initially since there is no physical Walmart store in the city.
Walmart will provide grocery services to customers in Bronx, Queens, and Brooklyn through Instacart Inc. it’s a company that sends gig workers to buy items for a customer and deliver them.
Shoppers on Instacart will be able to buy groceries from Walmart stores that are outside New York City, and then the contract workers will deliver these goods to them.
A spokeswoman from Walmart said, “It’s a dynamic space that’s big enough for multiple providers and multiple business models. Obviously, the pandemic accelerated things very fast. “
Doing so will obviously give Walmart more exposure since the company is partnering with a lot of other service providers to expand its reach. For instance, Reuters reports that the drivers who deliver products for Walmart GoLocal will come from Walmart’s delivery service, called Spark.
Instacart is another Walmart partner that is expected to offer food delivery and grocery delivery services to customers in many areas of New York.
Moreover, Walmart has announced that the company will deliver products through drones and autonomous vehicles. Where will these drones come from? Well, Walmart invested in 10,000 Federal Aviation Administration certified pilots from DroneUp.
As for autonomous vehicles, Walmart also invested in Cruise, which is an all-electric autonomous vehicle company. John Furner, the CEO and President of Walmart US, said, “Through these commitments, we’re learning how these technologies can get customers the items they need.”
He also mentioned that all Walmart stores are located approximately 10 miles from 90% of the American population, which puts the retail maestro in a unique position to offer deliveries.
By offering a food delivery service, Walmart will gain more visibility outside of its ecosystem.
Sylvian Perrier, the CEO and President of Mercatus, says, “This is a smart strategic play on Walmart’s part. Acting as a delivery partner allows Walmart to leverage its own infrastructure and at the same time put a firewall up against Amazon and other marketplace providers”.
So, it’s quite evident that Walmart understands the scope of these investments and new retail services. Also, the company has definitely thought well about this whole process rather than simply springing it on the market.
Walmart Diversifying Ecommerce with Third-Party Sellers
Walmart Marketplace is a retail hub for third-party sellers where they can offer millions of products to Walmart’s loyal customers.
Back in 2020, the marketplace only had 50,000 sellers, but the number nearly doubled in 2021. Currently, roughly 5,000 new sellers are joining the Walmart marketplace every month.
That’s a huge accomplishment for the company since it has managed to diversify ecommerce.
How Everyone is Doing Business with Walmart Benefits
According to Statista, Walmart’s ecommerce sales increased by 70% in 2021, adding up to $43 billion. These figures are not only good for the retail chain but also for everyone involved.
Third-Party Sellers
Since a huge number of Walmart’s sales are coming from ecommerce, third-party sellers have an advantage. Moreover, Walmart.com gets over 120 million unique visitors every month, which is a huge market to tap into.
Moreover, Walmart does not charge a monthly or account setup fee to its sellers. They only have to pay a referral fee for every purchase.
Employees
Currently, Walmart employs more than 2.3 million workers, of which 1.6 million are in the US alone. On average, store managers at the company earn up to $180,000 per year.
More importantly, Walmart is raising the hourly rate by $1 for over 55,000 workers in its merchandise and consumable departments, effective from September 25, 2021.
Also, the company claims they promoted over 200,000 people to higher responsibility jobs in the fiscal year 2020. As Walmart taps into a food delivery service, it will obviously create more employment opportunities.
Breakdown
Considering all the statistics and partnerships underway, it’s understandable why and how Walmart plans to introduce a food delivery service aside from its retail merchandise.
With this new service, Walmart is ensuring it will not lose its top spot as the largest retailer in the world.
