Dive Brief:

• Walmart plans to have employees make more last-mile deliveries as the retailer grows its third-party fulfillment capabilities outside of independent contractors, President and CEO Doug McMillon said at the Goldman Sachs Global Retailing Conference last week.
• The number of deliveries currently made by Walmart associates is small compared to the amount handled through independent contractors, particularly those on the company's Spark Driver platform, McMillon said. But as Walmart builds out its last-mile network, it will own more vehicles and have employees deliver more orders.
• "We have already demonstrated that we can serve third parties, whether it's last mile or it's fulfillment services, and that will just continue to get bigger within the U.S. and in some of the other markets that we've got," the CEO said.

Dive Insight:

Walmart is rekindling its efforts to have employees make deliveries as online ordering activity has surged in recent years.

In 2017, Walmart began testing the use of store employees to deliver online orders from stores to customers in select markets. Employees could volunteer to make deliveries after finishing their shifts while on their way home for additional compensation.

Walmart quietly ended the pilot program in 2018 after the initiative failed to gain traction with employees that "balked at having to use their own cars and personal insurance policies," Reuters reported.

That was before the COVID-19 pandemic turbocharged e-commerce activity, spurring top retailers to strengthen their fulfillment and delivery capabilities. Walmart's store-fulfilled delivery sales nearly tripled over a two-year period, CFO and Executive Vice President John David Rainey said on an earnings call in February.

Walmart’s InHome delivery service, which the retailer has been scaling since its launch in 2019, uses associates specially trained in the service to leave grocery deliveries and pick up Walmart returns in customers’ homes or garages by using a one-time access code that pairs with smart access technology.

Walmart has leaned on the thousands of independent contractors on its Spark Driver platform, its largest delivery provider, to complete many of these orders. Added capacity would be welcome as the company scales up its local pickup and delivery services and onboards new customers for Walmart GoLocal, its white-label delivery service.

Even a small percentage of Walmart associates making deliveries could significantly boost the retailer's delivery capabilities. As of Jan. 31, Walmart employed about 1.6 million associates in the U.S.