Walmart teaming with Instacart on same-day delivery pilot

Walmart has entered into a partnership with grocery delivery platform Instacart to bring same-day delivery to four markets in California and Oklahoma.

CNBC first reported Tuesday afternoon that the Bentonville, Ark.-based retail giant will start delivering items through Instacart ranging from groceries to home decor and more in Los Angeles, San Francisco, San Diego and Tulsa, Okla. The pilot marks Walmart stores’ first venture with Instacart, although Walmart-owned Sam’s Club currently has a delivery partnership with Instacart.

“We’re always looking for partners to help us better serve our customers,” a Walmart spokesperson said in an emailed statement to Supermarket News. “Customers love the value we bring with pickup and delivery. They’ve turned to us during the pandemic to bring them their goods safely and easily. As we continue to expand our own delivery from nearly 3,000 stores reaching nearly two-thirds of American households, we’re excited to test and learn in four markets reaching new customers with Instacart.”

"The new partnership brings thousands of items — from groceries, alcohol and pantry staples to home decor and improvement, personal care, electronics and more — at everyday low prices from Walmart stores to customers’ doors in as fast as an hour," said a statement from an Instacart spokesperson.

Related:Instacart lands $225 million in new funding

For Walmart, teaming with Instacart boosts its growing e-commerce business and bolsters its strength against retail rival Amazon. The largest retailer in the nation, with close to 3,000 stores, Walmart has been building its digital offerings, which recently include rolling out Express Delivery this summer, an online service offering home delivery of a wide range of groceries and other products from the store in less than two hours. Walmart expects to have Express Delivery in 2,000 stores, an expedited timeline in response to demand caused by the coronavirus pandemic.

During the pandemic, Instacart reported that order volume had jumped more than 500% year over year, with the average customer basket size growing 35%.

San Francisco-based Instacart continues to expand its delivery and pickup services beyond groceries, where the company partners with more than 400 retailers and 30,000 stores. This year, the company has expanded its roster of retailer partners outside traditional grocers, bringing same-day delivery to Big Lots, Staples U.S. and Rite Aid and branching into new categories such as alcohol delivery and prescription delivery with Costco Wholesale. A partnership announced earlier this summer with C&S Wholesale Grocers also stands to bring Instacart services to thousands of independent supermarkets.

For both Walmart and Instacart, the surge in demand for online grocery caused by the pandemic has called for unprecedented growth.

Related:Walmart to bring two-hour Express Delivery to 2,000 stores

Before the COVID-19 crisis, Instacart had about 130,000 full-service shoppers and 12,000 in-store shoppers to fulfill online grocery orders for same-day delivery or pickup. In late April, Instacart said it aims to hire 250,000 more full-service personal shoppers over the coming months to help meet skyrocketing demand for grocery delivery. A month earlier, the company announced plans to hire 300,000 new full-service shoppers and met that goal just weeks later, which expanded its shopper community to more than 500,000 people. At the time, Instacart reported that order volume had jumped more than 500% year over year, with the average customer basket size growing 35%.

Walmart reported U.S. e-commerce sales in the first quarter soared 74% year over year at the top line and grew 3.9% on a comparable basis.

Walmart’s online business has also been booming. The company reported U.S. e-commerce sales in the first quarter soared 74% year over year at the top line and grew 3.9% on a comparable basis.

“Before this crisis, we were already seeing robust adoption of online pickup and delivery,” said Doug McMillon, Walmart CEO, in a call with analysts in May. “As this crisis created a need for social distancing and required people to stay at home, customers embraced pickup and delivery even more. Pickup and delivery are attracting greater numbers of new customers. The number of new customers trying pickup and delivery has increased four times since mid-March.“

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