Walmart - Mike Mozart

Walmart Steps Up Its Uber-Driven Delivery Business

August 24, 2017         By: Steven Anderson

Grocery shopping has never been a particularly entertaining task, at least not for most people. Driving to the store, gathering up the goods, and then driving back home is a process that more than a few people could do without. Walmart is looking to change that by taking the driving parts out of the picture, thanks to a growing partnership with Uber.

The idea of Walmart involved in grocery delivery is not out of line; given that reports suggest 90 percent of Americans live within 15 minutes’ drive of at least one Walmart location, it’s pretty much prime territory for delivery. So Walmart turned to Uber to help bridge that last gap between Walmart customers and Walmart locations, that 15 minutes’ drive.

To this end, Walmart has established online operations, and even delivery in some of these. Reports note that San Jose and Denver locations feature a Walmart-specific fleet that handles delivery. Starting this week, Dallas, Phoenix, Orlando and Tampa will have delivery as well using Uber drivers.

It’s a move that allows Walmart to play to its strengths, specifically, its massive warehouse network known as its storefronts. It’s a force that Amazon, for all its own strengths, can’t hope to match on the fresh food front. Walmart can literally take food off store shelves, out of refrigerators or freezers, pack it up and get it to shoppers within minutes; all it needs to do so is the short-range delivery fleet to actually cover that last 15 minutes.

I’m not fond of Walmart grocery shopping myself. I actually have a more hometown favorite I stick with. But even I can see that delivery groceries from Walmart could be a very good plan. Those times when you need a “quick something” could be especially worthwhile here, and Amazon is going to have a tough time competing thanks to the sheer mass of Walmart’s physical network, perhaps one of the few times where brick-and-mortar has meant a serious advantage against online. With Uber throwing in for delivery, it gives itself a major new cash cow, and a whole lot of repeating business.

Whole Foods locations notwithstanding, Amazon is going to need a much bigger physical presence to match Walmart here, and that’s going to take a lot of investment Amazon likely doesn’t want to make.