Walmart has unveiled plans to add 500 new FedEx Office locations within U.S. stores over the next two years. The expansion comes after the completion of a successful pilot program spanning 47 locations within Walmart stores across six states.
“What we found was that 88% of customers who come to our locations are there to do business with us, but more than half of them are doing business with the retailer as well,” Brian Philips, CEO of FedEx Office, told Reuters during Shoptalk. “They are buying something at Walmart while they are there.”
Philips said that the move is a major part of FedEx’s strategy to handle more online returns and reduce some strain on fulfilling last mile deliveries. Online returns continue to grow year after year, and 44% of retailers say their margins are being strongly impacted by handling and packaging returns, according to Brightpearl. With more than 40% of retailers seeing increased “intentional returns” in the past year (customers ordering multiple items because returns are free or cheap), more FedEx Office locations would mean there is more manpower to handle the increase in returns volume.
Walmart-based FedEx Office locations offer customers access to packing, shipping and printing solutions near where they shop, work and live. Customers can enable any Walmart-based FedEx Office location to hold their packages for up to five business days either directly or by redirecting using FedEx Delivery Manager.
The move comes five months after FedEx completed the launch of package pickup and drop-off services available in nearly 7,500 Walgreens drugstores. FedEx already expanded this service to all 1,500+ Office Depot stores nationwide in 2016, as well as select Albertsons and Kroger stores.
FedEx is expanding these services as Amazon continues to build out its own delivery network. The e-Commerce giant is preparing to launch Shipping with Amazon or “SWA,” a package delivery service for businesses that could cut into business at FedEx and direct competitor UPS. As Amazon attempts to undercut FedEx’s shipping costs and scale its fulfillment capabilities — including accepting returns at Kohl’s department stores — the delivery services giant and Walmart feel equal pressure to provide more returns capabilities of their own.
The FedEx Office stores will be 450-to-700-square-feet in size. FedEx Office operates approximately 1,900 company-owned stores and locations in the United States.