Amazon, Walmart Keep Up the Pressure in Delivery Innovations

In-trunk delivery and the expansion of a restaurant delivery service  

Author: Krista Garcia

April 25, 2018

Walmart and Amazon launched new delivery initiatives, facing off yet again in their tit-for-tat fight to expand fulfillment options and speed up delivery to customers.

Amazon unveiled a plan to allow online purchases to be dropped off in the trunks of customers cars. The plan is initially available in 37 cities for two makes of cars (Volvo and GM), while users must be Amazon Prime members and use the Amazon Key app to grant access to couriers.

Walmart, for its part, announced a partnership with DoorDash in a grocery delivery trial limited to Atlanta for now. The retail giant is already delivering on-demand groceries in some markets through Instacart, Deliv and ride-share services like Uber.

What’s unusual in this case is that, to date, DoorDash has been strictly a restaurant delivery service, but also that it is foregoing its red t-shirt and delivery bag branding in this venture with Walmart. A Walmart.com shopper would have no idea their groceries were coming via an outsourced service. And do they really need to be?

Consumers don’t particularly care who delivers items as long as they are professional, according to a February 2018 survey by Dropoff. Only 12% of US internet users said they wanted packages delivered by the merchant they bought from while 75% thought professionalism was important. On the other hand, 70% said a delivery person in uniform would increase their trust and only 14% trusted “peer-to-peer” delivery services, which is a gray area that would include crowdsourced delivery by individuals but also could include companies like Uber or Walmart’s use of in-store staff to deliver packages on their way home that was introduced last year.

Most retailers aren’t Amazon, so rather than overhauling entire logistical processes, the quickest route to becoming more nimble is using outsourced delivery. According to the April 2018 Progressive Grocer "85th Annual Report of the Grocery Industry” report, 31.8% of grocers offer third-party delivery services, nearly double the figure from 2017 and a little more than those that provide store-supported delivery (28.0%).

Shoppers are still warming to grocery delivery, though it is likely that as retailers increase their offerings, more shoppers will begin using it. In a March 2018 survey by Field Agent, 72% of US digital grocery shoppers had obtained their purchases using curbside pickup compared to 19% who had used delivery. The leading retailer and format shopped was Walmart Pickup (59%). The next most popular (15%) was Kroger either using Instacart delivery or ClickList, the retailer’s pickup service.

Groceries are the online product category most desired the same day, so it is inevitable that more traditional retailers will be experimenting with faster services and Amazon will continue getting closer and closer to the consumer in the name of convenience.