Our take: Walmart announces in-home delivery
Last week, retail giant Walmart announced a major step in its ongoing efforts to be the proverbial top dog in the e-commerce arena when it announced in-home grocery delivery services.
As long-time last mile delivery and courier services providers, we are both intrigued and concerned with the implications of this latest news.
What’s the news?
According to this press release issued last Friday, Walmart is launching a test program this fall called InHome, which means a Walmart associate takes care of their grocery shopping for them – “from food aisle to fridge.” This pilot initiative will reach an initial 1 million customers in Kansas City, Missouri; Pittsburgh, Pennsylvania; and Vero Beach, Florida.
The program will work basically like this:
- Customers place a grocery order at Walmart.com and then select InHome Delivery and a delivery day at checkout.
- At the time of delivery, associates will use smart entry technology and a proprietary, wearable camera to access the customer’s home. Walmart says this gives customers the ability to control access into their homes and giving them the ability to watch the deliveries remotely.
Walmart’s release says that they will eventually expand the program to include the ability for customers to return items they purchased on Walmart.com by leaving the items on a designated countertop.
According to this article from TalkBusiness.net, Walmart sees this as continuing founder Sam Walton’s willingness to take risks.
“Greg Penner, board chairman for Walmart Inc., said Walmart is where it is today by taking bold risks to serve customers better. This, he said, is linked directly to co-founder Sam Walton. Daughter Alice Walton said, ‘Dad always encouraged experimentation.’ Those risks won’t always pay off in success, but Jim Walton – son of founders Helen and Sam Walton – said ‘dad always learned something by taking risks.’
“’Our success will depend on the risks we take and how well we execute changes,’ Penner added.”
From what we’ve read in comment sections of various other articles sharing this news, Walmart is going to have a bit of a public relations battle to get people to participate. A large number of commenters said they liked the idea of delivery service, but not the idea of someone entering their home when someone wasn’t there.
As experts in the logistics industry, we see both the potential positives and problems associated with this plan.
First, the potential good. Anytime a company makes it easier to do business with them, everyone can win. The customers’ lives can be made easier with this new plan and it could even help woo people to the retail giant who may have been more likely to shop at smaller, more niche grocery stores in the past.
We also believe in competition usually making a company or a person better. Even if this initiative fails, it will have taught Walmart and other retailers new lessons in e-commerce. We talked about this very issue related to Amazon recently on our blog.
At this time, however, we see a few more potential issues with this plan.
Privacy and safety
Although Walmart plans for body cameras and extra training, we agree that having a stranger enter a customer’s home when the customer isn’t there will be a hard sell. This could become a problem for both the customer and the employee.
Insurance and other costs
Insurance related to logistics-based services is sky-high right now. It isn’t unrealistic to assume that Walmart will have to pay for much higher insurance because of this plan. We also are well aware of the rising costs of maintaining a fleet and figure this could be an issue for Walmart as this program rolls out. How do these extra costs translate to costs to the customer and, ultimately, Walmart’s bottom line?
We could be wrong, and we will eat our words if we are. But with the initial reaction being a fairly strong “no way” so far to this plan, we would not be surprised if it doesn’t take off as well as Walmart hopes. The delivery service, possibly. Especially for busy families or those with mobility issues who struggle to make it to the store, even for grocery store pickup.
We at On Time Logistics love innovation and finding new, creative ways to serve the customer. We also believe in doing a few things incredibly well instead of trying to branch out with new concepts just to be ahead of the competition. New and shiny doesn’t always mean better.
Our last mile deliveries and courier services are orchestrated with the most efficient yet customer-friendly services in mind. We will never go into your home without someone there, but when we do, we offer white glove service and friendly, efficient overall service. Give us a call if we can help you today.