Walmart announced last week that they are collaborating with Uber for its grocery delivery service. The giant grocery chain is now offering grocery delivery in two new states in the US, Dallas and Orlando. Customers can now shop for groceries online and have them delivered right to their door step for a $9.95 fee.
Walmart has been experimenting with grocery delivery and it has been something they have been wanting to do for years now. They started of the delivery service in Denver and San Jose by using their own trucks.
Back in June 2016, Walmart began a test involving Uber as a form of delivery service for its customers in Phoenix, which then eventually expended to Tampa in March 2017.
The delivery service can be found on the same grocery shopping website where customers can place and pick up their ordered goods – a service that is available in most Walmart stores. There are now 900 Walmart locations offering grocery pick up, 300 more compared to last year and 800 more just from two years ago. For Walmart, for customers to pick up their own groceries makes more sense as it would appeal more to a regular Walmart customer. A cost sensitive customer would most definitely opt for the grocery pick up option compared to the delivery if there was a fee to be paid.
Now that grocery delivery is an option in some states in the US, at the end of check out there will be an option for customers to pick. Both services (pick up and delivery) requires a minimum spend of $30. However, of course with the delivery option as mentioned earlier requires an extra charge of $9.95. If customers happen to pick the delivery option at the end of check out, they will be alerted by email that their groceries will be delivered via Uber.
Walmart has not released any information on how they are splitting the fairs and charges with Uber. Besides that, they have also not shared any specifics on how well its delivery option is performing in terms of sales, users and repeat customers. But, Walmart did say that in their last earnings that its online grocery business was growing rapidly.
Amazon is not far behind on this market opportunity and recently obtained Whole Foods for $13.7 billion. Its grocery ambitions seem to be on the same wave length as Walmart. With Amazon also looking into opening more physical stores, they could eventually offer their customers a pick up option in the future as well. If and when Amazon does happen to fulfill this gap in the market, Walmart will have a huge competitor on its back.