Walmart announced this week a pilot test of grocery delivery service called “Spark.” While the service is available only in Nashville and New Orleans, Tom Ward, vice president of digital operations at Walmart, told the supplier community Thursday (Sept. 6) there are plans to add more metro areas in the coming months.
Ward was the featured speaker at the Greater Bentonville Chamber of Commerce WalStreet Speaker event held at Sam’s Club home office early Thursday. He said while Walmart is using third-party final-mile services like Deliv, Postmates and Doordash, the Spark test is using independent contractors who work on a fee basis.
Consumers in the markets where grocery pickup is available can have their order delivered as soon as the same day. The cost is $9.95, charged on top of the grocery order which must be at least $30. Walmart is offering customers free delivery on their first order of groceries ($50 minimum) when they use the promo code FRESHCAR when ordering.
He said Spark uses an in-house platform that gives drivers the ability to sign up for time slots that work for them. Ward said Walmart will continue to charge a flat delivery fee for grocery delivery because the retailer does not want to raise prices for customers choosing this option as other retailers do.
“We strive for every day low prices regardless of which format the customer shops. We think they appreciate the transparency of seeing the fee and also knowing they are getting the same prices as if they shopped in a store. We also see them ordering larger online baskets to get the most out of the flat fee,” Ward said during the event.
Ward also said the pilot is possible because of a partnership with Delivery Drivers Inc. (DDI) who is the administrator for the Spark delivery services, managing and recruiting drivers, conducting the screening and background checks as well as payroll and accounting.
“It is important to us at DDI that we help each independent driver run their transportation business correctly,” Aaron Hageman, CEO of Delivery Drivers Inc., said in a statement. “We are excited to partner with Walmart to allow them to focus on providing great products while we can build and support a professional driver network to focus on the delivery side of the business.”
Ward said Walmart is testing Spark because there are cities where its third-party final-mile delivery partners do not operate. He said Walmart is on its way to reaching 100 markets with grocery delivery this year which will cover roughly 40% of U.S. households.
Delivery is now available in about 50 markets, including Atlanta, Chicago, Dallas, Denver, Miami, Orlando/ Tampa, San Jose and Seattle. Ward said Walmart will continue to use with multiple third-party delivery providers as the retailer works toward its goal of 100 markets.
The service is not available in Arkansas and Ward gave no indication it would be in the near future. He said areas where there is already high brand affinity will likely not be slated for the delivery services unless demand dictates. But he did say the retailer plans in the next few years to put grocery pickup in nearly every store that has the space and parking available.