Walmart Shifts Focus from Employee Delivery to Driverless Cars

Is removing humans from the 'last mile' the future of delivery?

Author: Krista Garcia

July 31, 2018

It seems like anything goes in the race to get products to people faster, from Amazon couriers accessing shoppers' trunks to drop off packages to Walmart's in-fridge delivery using smart-home technology. 

Not all experiments are successful, though. Walmart's resolutely analog initiative to use store associates to deliver packages to customers on their way home from work ended without fanfare in January, according to Reuters. What seemed like a logistical nightmare on the surface may have played out in reality. The pilot that was taking place in stores across New Jersey and Arkansas has now been whittled down to four employees specifically hired as drivers at a single location in Georgia. 

Leveraging its massive workforce to reduce shipping costs, Walmart positioned this as good for employees as they would earn additional money on top of their hourly wage. They received 1 hour of overtime, fuel reimbursement and $2 per package, but according to Reuters, it often took more than 1 hour since employees often had to wait for the packages. Issues also arose around liability if a package was lost and using personal auto insurance policies for work. 

Consumers, however, have gotten a little lost in the retail delivery wars. A November 2017 survey by Recode found that neither Prime members nor nonmembers had much interest in buying an Amazon Key, the smart lock that allows in-home delivery. And according to an AlixPartners survey from the same month, 60% of US internet users wouldn't allow remote access for a delivery when they weren't home. 

And not everyone would trust someone to deliver a package if it wasn't a core part of their job, not to mention being uncomfortable with a local cashier knowing where they live. In a June 2018 Dropoff survey about holiday deliveries, US gift buyers had very low levels of trust in peer-to-peer services (12%). 

Walmart ended its partnerships with ride-share services Uber and Lyft in May, but still uses Deliv, Postmates and DoorDash, companies that are focused on delivering goods rather than people. 

Perhaps Walmart is onto something with removing humans from the equation altogether. Last week, the big-box retailer announced it would be testing online grocery delivery using Waymo (formerly the Google self-driving car project). While the order is being prepared by Walmart, a car will pick up and drive the consumer to the store to retrieve the purchase. 

Like remote deliveries, it's not clear if there is large consumer demand for this service. But a September 2017 PayPal survey measuring the interest level of technologies for the upcoming holiday shopping season showed that one-quarter of US internet users said they would consider driverless delivery, and an additional 30% would consider it in the next five years. In fact, driverless delivery garnered more interest than drone delivery and purchasing through voice-controlled devices or augmented/virtual reality.