Dive Brief:
- The Home Depot is the first retail client for Walmart's new delivery-as-a-service business, the companies announced Wednesday, giving Walmart a customer with billions of dollars' worth of online sales to fill its delivery vehicles out the gate.
- Home Depot will offer same-day and next-day delivery via Walmart GoLocal in select stores in Texas, New Mexico and Northwest Arkansas in the coming weeks, with plans for further expansion by the end of the year, according to a Home Depot spokesperson.
- Eligible Home Depot items for GoLocal delivery are smaller supplies that can fit easily in a car, like tools, fasteners and paint, the companies said in a news release. Qualified products will have a scheduled delivery option enabled at online checkout.
Dive Insight:
Walmart's nascent delivery service is starting with a bang. Home Depot should provide the company with plenty of orders to beef up delivery route volume as it leverages its delivery capabilities beyond in-house orders.
Home Depot made $19 billion in online sales in fiscal 2020 as COVID-19 drove shoppers out of brick-and-mortar stores, according to its 10-K.
"Earlier reports talked about helping more regional or local businesses, but it seems Walmart's appetite is bigger," Celia Van Wickel, former senior manager of direct-to-consumer and e-commerce shopper insights at Coca-Cola, said of the announcement on LinkedIn. "Is Walmart entering DoorDash and Instacart territory?"
With elevated e-commerce demand persisting, Home Depot wants to offer fast and reliable delivery options throughout the U.S. to keep online customers coming back. Home Depot currently charges $8.99 for same-day car delivery and is evaluating that charge on a market-by-market basis, the company spokesperson said.
"This partnership brings us even closer to our goal of offering same-day or next-day delivery to 90 percent of the U.S. population," Stephanie Smith, senior vice president of supply chain for The Home Depot, said in a statement.
It also provides Home Depot with a quick, local delivery option in a time when established local delivery services have grappled with driver shortages and capacity among major last-mile carriers is tight. More customers are expecting fast delivery, with 36% of U.S. consumers saying ordering online for same-day home delivery is important in a survey from project44's Convey released Wednesday.
"Free, fast, on-time delivery is the expectation, thanks to Amazon's dominant influence on retail," said Carson Krieg, director of industry solutions and strategy at Convey, in a statement accompanying the survey.
Walmart's delivery network can currently reach about 70% of the U.S. population, according to an August news release announcing the service. Tom Ward, senior vice president of last mile delivery for Walmart U.S., said in the announcement that GoLocal's flexibility is a big selling point.
"Be it delivering goods from a local bakery to auto supplies from a national retailer, we've designed Walmart GoLocal to be customizable for merchants of all sizes and categories so they can focus on doing what they do best, leaving delivery speed and efficiency to us," Ward said.
