(Reuters) – Walmart Inc and logistics firm Deliv pulled the socket on a key today with the grocery retailer partnership, which has a backlash in the dealer's race against rival Amazon.com Inc to deliver groceries to customers' homes.
FILE PHOTO: Walmart's logo is seen outside of one of the stores in Chicago, Illinois, USA November 20, 2018. REUTERS / Kamil Krzaczynski / Filfoto
The world's largest retailer began to strengthen partnership with third-party shipping companies to reach consumers in 100 US cities last year, after not using Uber and Lyft to deliver groceries, and struggling to try to use their own employees to deliver goods.
Deliv, one of Walmart's earliest partners with pilot programs in Miami and San Jose, served the dealer with a 90-day notice of termination, and the two companies stopped working with each other at the end of January, according to two people familiar with the situation.
Walmart confirmed the previously unreported decision and said it still cooperates with seven delivery companies, including DoorDash and Postmates, four of which were registered in January.
People familiar with the Walmart partnership with Deliv said that the Deliv drivers had to wait 40 minutes or more to collect purchase purchases when they appeared in the store. One reason for that, they said, is that Walmart prioritizes customers over the delivery drivers in regular hours, which complicates the partnership.
The shop operation at Walmart "was a big problem," one of the people said with direct knowledge of the case. It was not possible to "negotiate online grocery orders quickly enough."
Deliv refused to comment. Walmart spokeswoman Molly Blakeman told the Reuters dealer, and Deliv mutually decided to close the partnership. "As with any pilot, the purpose is to learn. And finally, with Deliv, while the platform is a good delivery option, it wasn't the best fit for our program at the moment."
Blakeman said that today's grocery store is available to time in 800 of its more than 5,000 US stores and storage clubs, and the dealer plans to add 800 more this year.
Deliv offers scheduled deliveries on the same day through gig drivers, a model that can work well with faster order processing and better ability to predict demand and robust volumes. Walmart is now mostly working with restaurant suppliers who deliver an order that and when it is generated, one of the sources said.
Both sources said that order volumes were low in many markets, and one source said orders had to be delivered over long distances, which resulted in both Deliv and Walmart losing money.
"When the partnership with Deliv was beaten, it was hoped that demand would be stronger than it is now," one source said.
Deliv operates in 1,400 US cities, and joins a network of local freelance drivers to deliver packages the same day for a fee for a number of retailers, from Home Depot Inc to Kohl's Corp.
In October, it raised $ 40 million in a new funding round from investors, including Alphabet Inc's Google and United Parcel Service. In December, it registered 20 new US dealers, including Nike Inc and Nordstrom.
Deliv can process and deliver thousands of orders in an hour. Walmart in San Jose sometimes generated just a hundred orders a week, and there was a problem handling that volume through stores, one source said. Walmart is working to fix the problems in their stores to process orders faster, add the source.
Blakeman said there were no problems with the order volume in the market.
The sources also told Reuters that Walmart has completed its own food store delivery test from 2017, where it collaborated with smart home security company August Home and Deliv for keyless entry to homeowners, to deliver groceries directly to the refrigerator.
Reporting of Nandita Bose in Washington; Editing Vanessa O & # 39; Connell & Edward Tobin