Walmart's New GoLocal Delivery Service30 August 2021
This week Walmart announced a new service to offer last mile delivery for third-party retailers called Walmart GoLocal (and the website is a bit rough). With Walmart’s within 5 miles of over 90% of the US Population, Walmart has a unique fulfillment advantage, especially for more rural areas - hence the brilliance of the branding GoLocal. But will retailers adopt the service?
Walmart touted the ability to support “mom and pop” stores, but the API integration required seems to make that prohibitive until they get standard integrations into common systems like Shopify and Stripe. That doesn’t seem that hard, but they may require specific information fields such as normalized SKU taxonomies, shipping prices and some data that may be missing like dimensions and weight. And while this is good PR, does Walmart really want to help mom-and-pop businesses or take those shoppers?
Mid- to large-scale retailers that have the data management and capabilities to integrate into Walmart would be wary to share customer and order info data with Walmart, a large retailer whose value proposition is undercutting prices and continuously providing a greater selection through its marketplace. That’s pretty sensitive data to provide to your fiercest competitor.
So what’s going on and why is this different than Instacart, DoorDash, UberEats and other delivery services? Maybe it’s not. Instacart has just started the ability to split an order to multiple fulfillment retailers, paving the way for less retailer loyalty and price optimization by SKU. And Instacart could easily begin adding microfulfillment centers and begin competing with its network at any time, either directly or indirectly. Ultimately, the scariest part for retailers is that they are allowing themselves to be disintermediated from the end customer. And once you lose direct control of the customer and the experience, you are in trouble.
So Walmart recognizes Instacart is a threat and can’t let it win in the battle for the customer, which means the battle to aggregate retailers. What will retailers do? Will they continue to see Instacart as benign? Will they expose their orders to Walmart on the back end because they still own the order experience? The fragmentation of the stack will be a challenges for anyone who can’t own the end-to-end experience, and that ultimately plays into the hands of Walmart, Target, Amazon, GoPuff and soon Instacart.
Book a demo to learn more.