Walmart plans to offer grocery deliveries in the New York area through Jet, the e-commerce company it acquired two years ago, according to US media.
The retailer will use a new fulfilment centre in the Bronx to offer consumers a choice of grocery items through Jet – the latest sign that Walmart is intent on developing its e-commerce business and launching a challenge to Amazon, which, on top of its own grocery delivery, piloted a meal kit subscription service last summer ahead of the opening of its first bricks-and-mortar convenience store in January.
Just two months after investing $16 billion in Indian online retailer Flipkart, Walmart will bring its full range of e-commerce capabilities together for the new grocery venture: Jet, which it paid $3.3 billion for back in 2016, will reportedly partner with Parcel, the New York delivery start-up bought by Walmart last October.
The retailer has never been able to effectively penetrate New York, met with resistance from city officials and unions. Online grocery delivery, offered through Jet and fulfilled through Parcel, will be its latest attempt to change that.
Jet already offers a range of groceries online.
Walmart has also announced plans to expand its online grocery delivery to roughly 800 stores this year, and will roll out an existing range of meal kits to 2,000 stores in the US as it continues to focus on millennial consumers increasingly calling for convenient, healthy options.
As well as Amazon, it finds itself up against Unilever, Campbell’s and Smithfield Foods – as well as fellow retailers like Kroger and Albertsons – all of which have invested in meal kit concepts in recent months.
The retail battle is moving into consumers’ homes
According to Walker Sands’ Future of Retail report, which surveyed more than 1,600 consumers in the US, nearly half of all people (46%) now prefer to shop online instead of in-store, including mobile and voice commerce.
At the end of last year, Amazon debuted a new service in some US cities called Amazon Key, which allows consumers to have deliveries left inside their home when they’re out. For the cost of a $250 kit, including a ‘smart lock’ and surveillance camera, consumers can select an in-home delivery option when they order products through Amazon’s website. If no one is home when the delivery is made, the Amazon driver uses an app to unlock the smart device and leave the parcel inside the door, before locking up again on their Amazon-provided handset.
The concept is designed for neighbourhoods where leaving parcels on the porch or in front of the house is problematic. Hidden-camera tests have demonstrated that Amazon’s delivery staff are generally discrete and considerate, but the service has still been fraught with difficulties since it made its debut. Numerous hacks have demonstrated flaws in the security of the smart locks, with dozens of commentators calling the service ‘creepy’.
But if Amazon can resolve the teething issues and bring consumers round to the idea of strangers entering their home, it will play into the company’s vision of integrating every aspect of consumers’ lives. Amazon could quite easily make and sell you your food, deliver it to your house and stock your fridge for you while you’re out at work.
Think that’s far-fetched? Not necessarily. The launch of Amazon Key almost diverted attention from Walmart’s partnership with smart lock manufacturer August at around the same time last year. The two companies are testing an in-home option that allows consumers not just to have their groceries delivered, put to have them put away too. It’s one of a number of areas of focus for the world’s largest grocery retailer, which is competing toe-to-toe with Amazon by investing heavily in e-commerce.
With retail companies continually exploring new ways to generate additional value from their customers, it is entirely plausible that food deliveries of the future won’t stop at the customer’s front door – but in their fridges.
© FoodBev Media Ltd 2018
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