Wal-Mart using Uber for online grocery delivery in Dallas, Orlando markets

Wal-Mart Stores is expanding its online grocery delivery into the competitive markets of Dallas and Orlando by using Uber, Mike Turner, vice president of Walmart U.S. e-commerce operations, said Monday (Aug. 21).

Wal-Mart announced partnerships with Uber and other crowd-sourced services at its June 2016 shareholder meeting. Since that time Turner said customers have told the retailer they “love having the convenience of a delivery option to facilitate their busy lives.” Turner said that is why the retailer is expanding the service in the two markets.

Wal-Mart is already piloting with Uber to make grocery deliveries in Phoenix and Tampa. This is in addition to a delivery service option using the retailer’s delivery trucks in the San Jose, Calif., and Denver markets, said Wal-Mart corporate spokeswoman Molly Blakeman.

“As you prepare for another chaotic day tomorrow, I hope you’ll feel confident knowing that we’re all about finding new ways for you to check ‘grocery shopping’ off your list a little faster – including making home delivery an option. We’re working hard to find a way to get you fresh, quality groceries all while keeping a little more time on your calendar,” Turner noted in the retailer’s blog post on Monday.

Customers shop online for their groceries as they typically do, or click the reorder button that details their last purchase. When the order is complete, Wal-Mart’s personal shoppers pick the order ahead of the delivery time. The retailer then requests an Uber delivery partner who picks up the order at the store and takes it to the customer’s home.

While grocery delivery has not caught on in the U.S. as has grocery pickup, retail insiders say it’s an important task retailers need to understand and make more available. Wal-Mart competitor Aldi just announced plans to partner with Instacart for grocery home delivery in the Dallas, Atlanta and Los Angeles markets. Aldi said the service will provide shopper the opportunity to have their orders delivered in as little as one hour.

FIVE REASONS FOR SUCCESS
Stewart Samuel, a grocery analyst with IGD, said the recent moves by retailers to expand home delivery of grocery purchases is a clear indication of where the shopper is heading and it signifies the growing importance of U.S. grocery e-commerce. Samuel recently told Talk Business & Politics that he expects to see more activity in the evolving grocery e-commerce sector this year on the heels of the Amazon play to acquire Whole Foods. Despite the stiff competition on all sides of the grocery market, Samuel recently outlined five reasons he believes Wal-Mart is winning with food in its U.S. division.

Last week the retail behemoth delivered its strongest U.S. grocery sales comp in five years which is important to the retailer’s overall financial success given that 56% of its U.S. sales are in grocery. And the U.S. segment overall comprised 63% of Wal-Mart Stores’ gross revenue in the second quarter ending July 28.

Samuel said Wal-Mart’s appointment of Greg Foran as CEO of the Walmart U.S. segment three years ago brought a “very different mindset to the retailer.” He said this prioritized leadership is the first reason he pegs Walmart U.S. winning in grocery.

“With extensive experience in fresh food retailing, he knew the importance of the category in setting shopper perceptions across the entire trip and driving store traffic. He quickly assembled a new team around him which put prioritized improving the fresh food experience in-store, and cascaded his vision across the entire organization,” Samuel said.

The second reason are the “fresh look” improvements to new and existing Walmart U.S. stores, Samuel said.

“Walk into a remodeled Walmart, and the changes at the front of store are clear. A new angled layout in fresh produce, along with lower fixtures, market style trays and chalkboard signage create a new look and feel within the department. At high level, bold category signposting and a new visual identity add an element of personality. Store teams have also been given more autonomy to merchandise products and encouraged to have fun in driving sales,” he added.

Fresh food begins with an optimized supply chain and Samuel said Wal-Mart’s improvements in this area are giving it a lead over competitors, making it his third reason Wal-Mart has an advantage. He said investments in the fresh food supply chain and in-store processes are aimed to improve freshness and quality perceptions, while also reducing waste.

“Farm-to-store lead times have been shortened, with a focus on moving product quickly out of its distribution centers to improve the shelf-life for its customers. In-store, basic shop-keeping disciplines have been re-introduced. New routines have been put in place for overnight stocking, markdown cadence and the rotation of fresh food, with store teams benefiting from new, specialist training,” Samuel said.

Fourth on the list is Wal-Mart’s work with suppliers to be a low-cost retailer. This is being funded through productivity and efficiency improvements and a focus on the cost of goods, he adds.

“Being the lowest cost operator is at the heart of the retailer’s operating model and its goal to drive price separation in the market. Wal-Mart U.S.has also made major investments in its private brands program, opening a new culinary and innovation center. This is helping it to work more collaboratively with its suppliers, lead on innovation and improve the success of new product delivery,” Samuel said.

Last, but certainly not least, Samuel said the retailer’s rollout of grocery e-commerce over the past two years along with the acquisitions of Jet.com put the retailer on a solid trajectory for future growth. He said pickup of online grocery has been rolled out to 900 stores and will grow to 1,100 stores by year-end.

“This has been a crucial element of Wal-Mart’s goal to improve access to its food proposition and offer greater convenience. The acquisition of Jet.com has also brought a new dimension to the business, providing Wal-Mart with the ability to reach new customer groups, including younger, urban-based shoppers,” Samuel said.