Walmart just upped its same-day delivery capability with the purchase of the Parcel delivery company.
The mass merchant, which has been experimenting with a raft of e-commerce delivery and pickup options, last week announced it would start offering free, same-day delivery in New York City.
At the time that Walmart U.S. e-commerce lead Marc Lore announced the development, Bloomberg News found the company’s customer service department was unaware the services was forthcoming.
Now with the announcement of the Parcel acquisition, how Walmart will facilitate these deliveries has become more clear.
Parcel currently works with meal kit, grocery and e-commerce companies to provide last mile capabilities. While Walmart intends for Parcel to continue working with these outside partners, the retailer says the New York-based startup will allow it to service New York, the top market for both Jet and Walmart.com.
Parcel automates operations and uses algorithms to route trucks to deliver within two-hour windows and overnight. “Customers’ expectations around delivery and what is possible have changed significantly in the past couple of years,” Nate Faust, senior vice president, Walmart U.S. e-commerce Supply Chain, said via a company blog post. “This acquisition allows us to continue testing ways to offer fast delivery while lowering our operating costs.”
New York City is also the testing ground for rival Target, which announced plans to purchase Grand Junction in August. Through that company’s technology and carrier network, Target has been testing same-day deliveries in the city’s TriBeCa neighborhood.
As e-commerce sales continue to rise, fulfillment has become the way in which retailers attempt to differentiate themselves—though with each innovation, delivery perks quickly become table stakes as additional retailers find new ways to incentivize purchases.
In January, Walmart did away with its ShippingPass membership in favor of free two-day shipping on two million items on the site. In response, Amazon lowered its free shipping minimum to $35, matching Walmart’s new threshold.