Walmart trialing "Associate Delivery" service

USA supermarket giant Walmart is asking employees to deliver online orders to customers on their way home from work in an attempt to close the gap with rival Amazon.

Wal-Mart Stores Inc (NYSE:WMT) is testing delivery-by-employees program in a bid to "cut shipping costs and get packages" to customers' doors "faster and more efficiently".

The program is still in test phase and only available at three stores so far - two in New Jersey and one in northwest Arkansas.

Wal-Mart's stores are within 10 miles (16 km) of 90 percent of the USA population, Lore said.

Lore called it a game-changer in Wal-Mart's ability to use its stores to move ahead in e-commerce.

Here's how it works: Trucks moving items from fulfillment centers to stores in the test areas are also taking orders to stores nearest the delivery address.

The opt-in program, which is app-based, enables employees to set preferences, including how many packages they can deliver, the size and weight limits of those parcels, and which days they're able to make deliveries after their work shift ends. For example, there are routing algorithms that minimize the collective distance the employees need to travel off their commutes home to make the deliveries.

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Wal-Mart compensates the employees for it but declined to elaborate how it works.

Here's how it works: At the end of a regular shift, an associate picks up packages from the store's backroom, loads them into his or her auto, gets directions through their phone and heads back toward home, making stops along the way.

A map Jariwala showing dots where employees live and where deliveries were going for one recent day revealed extensive overlap.

Under the plan, associates will deliver some orders on their way home using their own vehicles. Expect Walmart to expand it rapidly, and other retailers to watch closely and follow suit. Lore is the former CEO of e-commerce startup, which was acquired previous year by Walmart for $3.5 billion to take on Amazon. However, company officials say e-commerce is still a relatively small part of overall sales. The tower allows customers, who choose to order something online and have it sent to a store, to pickup their purchase seamlessly, company spokeswoman Anne Hatfield told TheStreet. Walmart operates 4,962 stores in the USA that total 789.6 million square feet. And we can completely believe that Walmart will make the additional pay for deliveries fair to workers.

At Walmart, Lore has tapped Walmart's massive brick-and-mortar infrastructure to further speed up shipping times.

The concept is brilliant in its simplicity: Ship online orders to stores ... for delivery by sales associates.

In January, the company started offering a free two-day delivery service for orders $35 and over - a direct shot at Amazon Prime's free two-day shipping program offered through a $99-per-year membership free. Still, the final delivery step to a customer's home - what the industry refers to as the "last mile" - "makes up the lion's share of fulfillment costs", Jariwala said. That service is a result of the company's acquisition past year of online retailer

  • Delia Davidson