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Walmart Associate Delivery Pilot Aims To Trim Last Mile Costs

In the everlasting battle to win the last mile, Walmart is calling on an unlikely source: the store associate. The retail giant is testing an app that matches online order delivery addresses with its employees’ driving routes, so these associates can deliver packages on their way home.

Marc Lore, President and CEO of Walmart’s U.S. E-Commerce business and Jet.com, revealed in a blog post that the first tests will take place in two unnamed stores in New Jersey and one in Arkansas.

As retailers test out (and many fully implement) new fulfillment options such as one-day or even same-day shipping and buy online/pick up in-store, Walmart is turning the ship-from-store concept on its head by removing the heavy costs often associated with shipping and delivery.

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“It just makes sense,” Lore wrote in the post. “We already have trucks moving orders from fulfillment centers to stores for pickup. Those same trucks could be used to bring ship-to-home orders to a store close to their final destination where a participating associate can sign up to deliver them to the customer’s house.”

McKinsey & Company estimates that the cost of last mile parcel delivery can often be more than half of an item’s total delivery cost, making it imperative for retailers to cut costs while improving fulfillment efficiencies.

“Walmart’s store associate delivery initiative represents a shift in the landscape of last mile delivery,” said Tushar Patel, CMO of Kibo in commentary provided to Retail TouchPoints. “To date, we have seen a majority of retailers test out and implement BOPIS initiatives to not only maximize their shipping strategy and drive in-store traffic, but to also deliver a competitive offering against Amazon. Through this test pilot, Walmart is taking the last mile delivery one step further and creating a broader ecosystem that not only utilizes their physical store presence as a central hub for retail operations but maximizes the power of their physical presence to aid in their order fulfillment strategy. It may be possible that we will see this type of strategy become more popular as retailers continue to transform their operations moving forward.”

Associate participation in the home delivery program is voluntary, and they can set preferences for how many packages they can deliver, the size and weight limits of those packages and which days they’re able to make deliveries after work. The retailer assigns deliveries to associates in a way designed to minimize the distance they collectively need to travel.

“This is the right approach to think ‘outside the delivery box,’” said Nick McLean, CEO of OrderDynamics in commentary provided to Retail TouchPoints. “Beyond that they are including their staff, adding the human touch, which is the ultimate benefit of the physical retail presence. At a time when so many retailers are laying off staff, and there is a feeling of disenfranchisement among associates, this is a great way of getting them engaged to promote positive customer experiences. Best of all this shows omnichannel brick-and-mortar retailers they have a solid opportunity to gain customers with excellent service, solid retail technology, and a splash of creativity.”

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