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Walmart Develops New Associate Delivery Program After Flubbed First Attempt

Retailers and e-commerce merchants continue to experiment and innovate in an attempt to find the most expedient way to deliver merchandise to their customers in the “last mile” of the delivery chain in a timely manner.

Walmart is taking a second stab at having its in-store associates act as delivery services to customers near the stores where they work. The retailer initially launched the program last year as part of its efforts to minimize shipping costs and support its $11.5 billion U.S. e-commerce business. It was also supposed to provide workers with a little supplement to their existing hourly pay, but at just $2 per package and what often took at least 30 minutes of work, according to reports from Reuters, workers weren’t keen on the concept.

Marc Lore, head of Walmart’s e-commerce operations, said speaking at the company’s annual meeting in June 2017, “Just imagine associates all over the world delivering orders to customers on their way home. That can be a real game-changer.”

The project, launched in New Jersey and Arkansas, was short-lived and Walmart dropped it completely in January.

“The first associate delivery pilot ended early this year and we’ve taken what we learned to develop a very different version of associate delivery that provides an improved experience for our customers and associates,” a Walmart spokesperson told Sourcing Journal.

Now the 2.0 version of the initiative will enlist just four employees hired as delivery drivers in one Woodstock, Ga. store. In order to build demand, Walmart will waive the fee to consumers for the first delivery order if it is for $50 or more, which, according to Reuters, was posted on promotional material at the store. For subsequent orders, Walmart’s mobile app offers delivery on a minimum $30 order for a fee of $7.99 to $9.95, depending on the package.

“There are many different ways we can deliver items to our customer’s door,” the Walmart spokesperson said. “We’re testing different ways we can do that, from expanding delivery to using the third-party providers to potentially using our own associates. The pilot has been running in one store in Georgia for the last few months and we’re encouraged by what we’re seeing.”

As part of its trial of last mile options, Walmart offers U.S. e-commerce shoppers the ability to drive to their local store to pick up merchandise they ordered online. It also uses shippers such as FedEx Corp. and the U.S. Postal Service for routine deliveries, along with companies like Postmates, Deliv and Doordash to help deliver groceries. Most recently Walmart partnered with Alphabet Inc.’s Waymo. In the trials, Waymo’s Chrysler vans will transport consumers to Walmart stores after they buy items on its website.

Elsewhere in the industry, companies are experimenting with new ways to get consumers their packages faster and more efficiently.

Amazon—which Walmart has steadily been going after—launched a program aimed at helping entrepreneurs build their own companies delivering Amazon packages, while serving as a solution to the last mile challenge. As part of the initiative, designed to help interested entrepreneurs start, set up and manage their own delivery business, owners can earn as much as $300,000 in annual profit operating a fleet of up to 40 delivery vehicles. Individual owners can build their businesses knowing they will have delivery volume from Amazon, access to the company’s delivery technology, training, and discounts on a suite of assets and services, including vehicle leases and comprehensive insurance. Amazon has also developed services that allow for in-home and in-car deliveries for Prime members with the technology to allow for it.

UPS is test driving a pilot program with Latch smart access devices to allow in-building deliveries to multi-unit homes in New York City and the idea could serve to reduce package theft as e-commerce continues to expand. Jet.com, an e-commerce focused subsidiary of Walmart, also has a pilot program with Latch for delivery in the New York area.

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