Why Walmart is asking its employees to deliver packages on their way home from work
Walmart's newest tactic in its fight against online giant Amazon: Asking its employees to deliver online orders on their way home from work.
The idea, Walmart executives said Thursday, is to cut costs on the so-called last-mile of deliveries, when packages are driven to customers' homes, often the most expensive part of the fulfillment process.
"It just makes sense: We already have trucks moving orders from fulfillment centers to stores for pickup," Marc Lore, chief executive of Walmart's eCommerce business, and the founder of Jet.com, said in a blog post Thursday afternoon. "Those same trucks could be used to bring ship-to-home orders to a store close to their final destination, where a participating associate can sign up to deliver them to the customer's house."
The company began testing the package-delivery program a month ago in three stores - two in New Jersey, one in northwest Arkansas - but did not offer details on when, or where, it would expand across the United States.
Employees will be paid extra, and offered overtime pay as necessary to make the deliveries, Walmart spokesman Ravi Jariwala said Thursday.
"Walmart is uniquely qualified, uniquely positioned, to be able to offer this," he said, adding that 90 percent of Americans live within 10 miles of a Walmart store. "There is really strong overlap between where are associates are already heading after work and where those packages need to go."
The company is billing the program as a way for employees to earn extra money, although there were few details on how they would be paid. Jariwala declined to clarify whether employees would be paid based on distance, time, number of deliveries or a combination of those things.
Jariwala said Walmart employees have delivered hundreds of packages over the last month, fulfilling orders placed on Jet.com, which Walmart acquired last year, as well as Walmart's own website.
The announcement comes as Walmart doubles down on its online business, where sales grew 63 percent in the first quarter of this year. The company - long the country's largest retailer - has taken aggressive steps in the past year, beginning with its $3.3 billion purchase of Jet.com to compete with Amazon.com, which currently accounts for about 33 percent of the country's online sales. (Jeffrey P. Bezos, the founder of Amazon, owns The Washington Post.)
Walmart has also been rapidly expanding its grocery pickup program, in which shoppers retrieve online orders in the parking lots of a nearby store. More recently, the company has begun offering discounts on certain digital purchases if customers opt to pick them up in-store. In that model, Walmart uses its own trucking fleet to deliver packages to stores, tapping into an existing transportation network.
A year ago, Walmart announced it would partner with ride-sharing services like Uber, Lyft and Deliv to deliver groceries in Phoenix, Denver and Miami. Those efforts are ongoing, Jariwala said.
Walmart's move comes as Amazon continues to build up its transportation and logistics firepower to support speedy delivery. Amazon.com has leased a fleet of 40 cargo jets to bolster its supply chain, and has developed an Amazon-branded trucking fleet. The Seattle-based company has also created Amazon Flex, an on-demand network of drivers, in which the model is similar to Uber or Lyft.
The program is voluntary for Walmart employees, Jariwala said, adding that they can sign up for up to 10 deliveries per day using a company app. They can also set size and weight limits on packages. If there are not enough employees to deliver packages, Jariwala said carriers like UPS and FedEx would fill in.
"This is completely an opt-in program," he said. "This is not something associates are required to do. They are, first and foremost, always going to finish their shift."