Walmart has announced a new in-house pilot delivery service that crowdsources independent drivers to fulfill the “last-mile” delivery process.
The grocery giant is working with a third-party company called Delivery Drivers Inc. (DDI), which manages contract driver recruitment, screening, payments, and more. This partnership will ultimately serve as the backbone to the new Walmart service, which will be known as Spark Delivery.
Walmart has offered delivery services for a while already, initially partnering with Uber and Lyft before ditching the ride-hailing firms in favor of the likes of Postmates, DoorDash, and Deliv. But Spark Delivery represents Walmart’s first attempt at building its own internal platform that allows drivers to sign up for delivery slots and access order details.
The Amazon factor
Walmart and Amazon have increasingly competed against each other in the retail realm, a battle that hit fever pitch last year when Amazon entered the brick-and-mortar grocery realm in a big way with its $14 billion Whole Foods acquisition.
Spark Delivery represents Walmart’s latest attempt to fend off Amazon by leveraging technology, though the service is very much like Amazon Flex, a delivery platform that effectively lets anyone who owns a car become a courier. Amazon Flex is focused on parcels, while Spark Delivery’s raison d’être is groceries — but the principle is the same.
Moreover, the big online retailers just can’t get enough drivers to fulfill demand for super-fast deliveries. A couple of months back, Amazon announced that it is looking to create a network of independent delivery fleets and it wants “hundreds of entrepreneurs” to “start businesses” in support of this goal.
For now, Spark Delivery remains a pilot program limited to Nashville and New Orleans, though the company plans to expand to more metro areas later this year. It’s easy to see how Walmart could make Spark Delivery its default service for all deliveries across the U.S. — but for now it will continue to rely on third-party delivery partners.
“We’re always looking for the best ways to serve them [customers], so we’re exploring a number of different options for getting groceries from our stores to the customer’s front door — some in-house, some third-party,” noted Tom Ward, VP of digital operations for Walmart U.S.
“Walmart’s work with third-party delivery providers continues to be a leading part of delivery strategy and important to the future, even as this pilot begins,” the company added.
At the time of writing, Walmart’s delivery services cover nearly 40 percent of U.S. households, spanning nearly 100 metro areas.