Walmart Fast-Tracks Express Delivery

Walmart has revealed plans to expand its nascent Express Delivery platform to 2,000 stores in coming weeks, providing online consumers an option to shop an edited selection of groceries and essentials for delivery in less than two hours—and essentially, buy their way out of delivery queues congested by the booming demand for perceived safer shopping options that have come with the COVID-19 pandemic.

Express Delivery was piloted at 100 stores beginning in mid-April; it will expand to 1,000 stores early this month and to 2,000 “in the following weeks,” the Bentonville, Ark.-based retailer said.

The service, which shares similar characteristics with an offering announced late last month by H-E-B and its Favor delivery app as well as the Kroger Rush pilot, comes with a $10 charge on top of other delivery fees. Paid subscribers to Walmart’s Delivery Unlimited service will incur only the $10 Express fee.

Walmart said it was hustling out the new offering to meet consumer shopping changes brought about by the COVID-19 pandemic. “[W]hen we come out of this, customers will be busier than ever, and sometimes that will call for needing supplies in a hurry. COVID-19 has prompted us to launch Express Delivery even faster so that we’re here for our customers today and in the future,” Janey Whiteside, chief customer officer of Walmart, said in a statement.

Express Delivery will use Walmart’s in-store staff to pick and pack orders from stores, which will be delivered to consumers by contract drivers.

While H-E-B’s offering—also known as Express Delivery—made clear the $10 fee was a tip for drivers, Walmart did not specify the beneficiaries of the added fee. Presumably, it would in part incentivize contract drivers to prioritize Express orders.

It also represents a new tact in a delivery arms race with competitors such as Amazon that, until the pandemic came along, saw consumer delivery fees dropping, or even disappearing, even as fulfillment speeds increased.

“What Walmart’s doing is brilliant,” Sylvain Perrier, president and CEO of Mercatus, a Toronto-based digital shopping platform, told WGB. “They’re sticking it to Amazon, Instacart and Shipt by saying, we know our consumers are prepared to pay more. So we'll take our drivers for our standard orders and bump them to this Express level. They’ve also narrowed the items available to those that they know consumers want the most, they know that they can supply and, quite frankly, probably provide the best margin for them. I wouldn’t be surprised if this can raise their revenues for this quarter and the next.”

The selection for Express Delivery will consist of more than 160,000 items from its food, consumables and general merchandise assortment such as groceries, everyday essentials, toys and electronics. Walmart.com, by contrast, has more than 80 million items for sale, including third-party marketplace items.

Perrier speculated that edited selection could be confined to certain aisles of the stores that Walmart’s pickers could shop from, thereby reducing the time and cost of preparing Express orders.

Walmart said Express Delivery “builds on the existing inventory of pickup and delivery slots available to customers,” creating more opportunity for customers to shop with the retailer when and how they want. Online shoppers are especially valuable to food retailers as it helps them not only to win incremental business, but because omnichannel shoppers tend to spend more of their overall budget with retailers that can provide it.

“We have an opportunity to serve our customers no matter what life calls for,” said Walmart’s SVP of Customer Product Tom Ward. “Whether it be a last-minute ingredient, medicine when a fever hits, or the item you didn’t know you needed when checking off your chore list, time matters. Express is a solve for that.”

Since the onset of the pandemic, consumer demand for grocery e-commerce has soared beyond the current ability of infrastructure and labor to support it, pressuring retailers and their e-commerce partners to hire hundreds of thousands of new workers, including delivery drivers and in-store shoppers. Many consumers seeking delivery have been frustrated with lengthy delays and unavailability for delivery windows. Scott DeGraeve, a co-founder of retail software Locai, told WGB recently there was virtually “unlimited demand” for online shopping since March. “The limit is whatever you can satisfy at this point for right now. It’s just a question of how much you can take on.”