Walmart on Tuesday announced the launch of a delivery service called GoLocal, which will transport goods from other local retailers to consumers.
The company said it expects to start shipping by the end of 2021 and that the delivery fleet will include newer technologies such as autonomous vehicles and drones.
“It’s about giving capabilities that, like Walmart, we’ve focused on laser to build and connect our own customers with the lives of local and national businesses,” Tom Ward, senior vice president of Last Mile, told CNBC for Walmart.
Walmart said GoLocal will be a white-label service, meaning Walmart-branded vehicles will not make deliveries to them. The company said it will offer competitively priced shipments within two hours, as well as a two-day delivery option. Deliveries will be managed by a combination of associates, concert workers and sometimes other delivery companies.
Walmart is currently partnering with FedEx for online package delivery. The company would not say if FedEx would be used for GoLocal.
However, Ward said the company would take advantage of innovative delivery partners, including Cruise, a self-driving electric vehicle company the retailer invested in last year, as well as Waymo and Nuro. Drone delivery will also be a focus, with partners such as DroneUP, another company Walmart invested in last year, as well as ZipLine and FlyTrex.
“What excites us is that as we scale this, we have all these different disruptive technologies that allow us to work together at Walmart for the last mile,” Ward said.
Walmart has spent the past five years building its capacity to deliver goods to customers. In August 2016, it acquired e-commerce company Jet.com for $ 3.3 billion. In March 2018, Walmart launched its grocery delivery service, fulfilling orders from Walmart stores. The company launched Walmart Fulfillment Services in February 2020 to compete with the growth of market-focused sites like Amazon and Shopify.
The company suspended Jet.com in May 2020, but CEO Doug McMillon credited the acquisition to help Walmart grow its distribution network.
Amazon launched a similar service, called Amazon Shipping, in 2018, designed to compete with UPS and FedEx, but suspended the service in June 2020.
Bernstein senior transportation analyst David Vernon said a local delivery service from a retailer will have no significant impact on FedEx and UPS revenue.
“The local delivery market has 230,000 companies competing in every city in America,” Vernon told CNBC. “There are two national parcel networks. They have some overlap; the business is moving to some of these local companies. But in the long run it’s not exactly the same.”
Walmart said GoLocal already has contracts with several domestic retail customers and will begin accepting applications for new partners on Tuesday.