Walmart is taking aim at Amazon’s dominance of online retail, and a big part of its strategy is using more than a thousand of their physical stores essentially as delivery warehouses. By the end of 2020, Walmart plans to deliver online orders from 1,600 of its retail stores. In comparison, Amazon has only 110 warehouses across the country, making most shipments significantly more expensive.
This is big news for the last-mile industry because fast delivery and fast returns are critical when it comes to customer satisfaction — and expectations for speed will only get more intense. Amazon Prime has made huge leaps by offering free, one-day shipping, but if Walmart can win the battle for two-hour delivery, they will be able to meet a lot of demand.
Walmart’s success is also big news because for those competing with Amazon (and its willingness to spend $11 billion this quarter on shipping) in last-mile delivery, the future often looks dim. Not for Walmart, it appears. Its stock has even grown faster than Amazon’s since March 2019. Meanwhile, its online grocery business, now aided by a robot grocery picker, has already been a star for the company.
While not every company has Walmart’s enormous resources, there’s a lesson here: develop a strategy that fuses your retail and online presence, which has been the smart move for years now. Walmart is beginning to demonstrate that. Even though the Amazons of the world seem to be gobbling up market share, retail stores still have one advantage: physical proximity. If a store can take advantage of that, along with streamlined delivery and pickup software, that’s a way to grow in such a competitive space.