Walmart Teams With Instacart on Same-Day Deliveries

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Walmart Teams With Instacart on Same-Day Deliveries

By Thad Rueter - 08/11/2020
Walmart Teams with Instacart on Same-Day Deliveries
Walmart is working with Instacart as the retailer prepares to launch a Prime-like subscription service.

Walmart reportedly will use Instacart to offer same-day deliveries to customers, the latest development in the ongoing fight between the retail chain and rival Amazon.

Walmart and Instacart are testing the service in four California markets and Oklahoma, according to CNBC. Neither Walmart nor Instacart offered immediate comment Tuesday, but Instacart had already added Walmart to its list of available retailers in San Francisco and other areas.

Retail and grocery deliveries — and the technology and infrastructure that support them — have enjoyed a growth spurt during the pandemic as consumers remained at home and refrained from going inside stores out of worries over health risks. In the meantime, Walmart has ramped up its efforts to boost the appeal of its mobile commerce offering, while Instacart has recently raised $225 million to scale its operations as it races to keep up with unprecedented shopper demand for online grocery.

In fact, according to retail research firm Intelligence Node, 46% of consumers report having never bought groceries online before the pandemic. Now, 17% say they shop for groceries online once per week and 13% shop the digital channel up to three times per week.

Instacart Rising

Instacart, which has hired about 300,000 new workers since March, is now accessible to more than 85% of households in the United States, across all 50 states, and more than 70% of households in Canada. The company has accelerated its launch cadence with retailers since the start of the year and now partners with more than 400 national, regional and local retailers across more than 30,000 stores in the Untied States and Canada. In late July, for example, Costco and Instacart said they would launch same-day delivery from 76 Costco warehouses across Canada. The two companies already have a strong relationship throughout the U.S., including prescription and alcohol delivery. 

“Today, we welcomed Walmart to the Instacart marketplace for the first time in the U.S. Instacart now delivers from Walmart locations in three California markets — Los Angeles, San Francisco and San Diego — as well as Tulsa, Oklahoma,” an Instacart spokesperson said in a statement given to CNBC. “The new partnership brings thousands of items — from groceries, alcohol and pantry staples to home decor and improvement, personal care, electronics and more — at everyday low prices from Walmart stores to customers’ doors in as fast as an hour.”

Walmart Prime?

As for Walmart, expectations have been building about when it might launch an Amazon Prime-like subscription program called Walmart+. The service reportedly would cost consumers $99 a year for same-day delivery of groceries and general merchandise, discounts on fuel at Walmart gas stations, and early access to product deals. Amazon Prime typically costs $119 a year and includes delivery, streaming and other features — and serves as a way to tie consumers into the vast and always expanding Amazon e-commerce ecosystem.

All these real and potential delivery moves come as Amazon continues to build out its own distribution capabilities — along with increasing its power in the food retail space. Recently, news emerged that Amazon is investing in the speed of its supply chain by leasing an additional 12 Boeing 767-300 aircraft ahead of next year’s opening of the Amazon Air Hub near Cincinnati.

Bentonville, Ark.-based Walmart operates more than 11,300 stores under 58 banners in 27 countries, and e-commerce websites, employing 2.2 million-plus associates worldwide. Walmart U.S. is No. 1 on The PG 100, Progressive Grocer's list of the top food retailers in North America, while Walmart-owned Sam's Club ranks No. 9 on the list. Seattle-based Amazon is No. 2 on the list.