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Feature Article from Our Distribution and Materials Handling Subject Area - See All

From SCDigest's On-Target E-Magazine

- April 1, 2013 -

Supply Chain News: Multi-Channel Fulfillment Wars Continue on, as Walmart Makes a Lot of News

Says It May Use Customers for Delivery, Will Pilot New Locker Program, is Expanding Test for Stores as Fulfillment Points


 SCDigest Editorial Staff

After a lull of a couple of months in news relative to the multi-channel delivery wars (see Here Come the (Same Day) Delivery Wars), there were three news items in recent weeks on new e-fulfillment tests and programs by Walmart, which increasingly seems to be in an on-line death match with

First, Reuters broke a story last week that said Walmart is in the very early planning stages relative to a concept that would involve existing customers delivering e-commerce orders for their neighbors - whether they know them or not. This is part of an overall Walmart strategy of leveraging its thousands of stores in e-fulfillment processes, hoping this will reduce transportation costs (maybe yes, maybe no) and therefore giving it a huge advantage over the store-less Amazon.

SCDigest Says:

Walmart's hope to use its thousands of stores not just as potential pick-up locations (order on-line, pick up in store) but as the base for local e-fulfillment is also now being tested in an expanded pilot.
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According to Reuters, in addition to Walmart's on-going test of its "Walmart To Go" same day delivery service in five markets, which uses the retail giant's own trucks/vans, the company thinks there is a chance customers themselves could be brought into the mix.

"I see a path to where this is crowd-sourced," Joel Anderson, chief executive of in the United States, said in a recent interview with Reuters.

Mirriam Webster defines crowd-sourcing as "the practice of obtaining needed services, ideas, or content by soliciting contributions from a large group of people and especially from the online community rather than from traditional employees or suppliers."

In this case, the crowd would be the thousands of customers that shop in a Walmart store every day.

The concept is that Walmart shoppers who want to be part of the program would tell Walmart where they live. The stores would use mapping technology to see whether there are on-line orders needing delivery that are on or near a given customer's route back home.

Anderson said Wal-Mart would offer a discount on the customers' in-store bill, effectively covering the cost of any extra gas burned in return for the delivery of the goods.

"This is at the brain-storming stage, but it's possible in a year or two," Jeff McAllister, senior vice president of Walmart US innovations, told Reuters.

But of course there are a number of challengers to the concept. It seems likely the customers would want to make a profit from the arrangement, rather than just having their gas costs covered for their time and effort.

Certainly there would be insurance and liability issues -would Walmart be on the hook if a customer delivering an order got into a wreck as he or she deviated from normal routes home?

And what if a customer forgets to make the stop, has some emergency come up, or says he or she isn'
t able to find the location (or maybe encounters a nasty dog there once they arrive)?

Or the other way - on-line customers at home don't like the look of the person coming to deliver their Walmart orders - and maybe with good reason. It would certainly be a lot different than the neatly uniformed UPS or FedEx driver walking up the driveway. And in what cases would Walmart expect a customer delivery agent to somehow capture proof of delivery?

In some areas, the delivery customers may also need to obtain a courier's license.

These and probably many other issues would seem to be tall obstacles to the idea - maybe quite a bit too tall in the end.

Test of Store Fulfillment Expanding

Walmart's hope to use its thousands of stores not just as potential pick-up locations (order on-line, pick up in store) but as the base for local e-fulfillment (as Macy's is also doing) is also now being tested in an expanded pilot.

(Distribution/Materials Handling Story Continues Below )


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The company is currently using about 25 stores as e-fulfillment points, and intends to double the number of store sites participating in the test to about 50 in coming months, Walmart's Anderson says.

Walmart Also Starts Locker Program

In mid-2012, news broke that was installing "Amazon Lockers" in major metro markets, a program under which the company will leave ordered items for easy customer pick-up in secure storage locations. (See Continues to Up the Fulfillment Ante with Nascent Locker Strategy.)

It is designed to enable Amazon to securely drop off orders for customers who aren't home in the day, and where the package cannot be left "on the front porch" as they often are in many suburban areas. This is especially a problem, obviously, for the large percentage of city residents who live in apartments and condos, where packages either cannot be left in the hallway, or where an increasing number of deliveries are being stolen before they are retrieved by the customer.

Amazon has the program going in four or five major metro areas such as New York and San Francisco, generally in existing retail store locations of partners such as 7-11 convenience stores and more recently an announced partnership with office products retailer Staples.

Now Walmart says it is getting into the game, but offering the locker approach in its own stores, naturally enough, with about 12 locations planned in one market by this summer. The company decline to name the city during a media event last week at San Bruno, CA, headquarters of @WalmartLabs, its digital innovation research arm.

The only apparent advantage seems to be that customers can come into the store and pick up their orders without needing to go to a service desk.

That approach also won't help Walmart in the many large urban markets where the company has little or no store presence in the downtown areas, unlike the Amazon Locker program approach that was designed exactly for this challenge.

While Walmart is the world's largest company, with sales last year of an incredible $469 billion. But Wall Street expects the company to do "only" $9 billion in e-commerce sales in 2013.

Conversely, had sales of $61 billion in 2013, most of it from e-commerce, and should easily exceed $70 billion this year, likely by a lot. Its revenue rose 27% in 2012.


What is your take these latest e-fulfillment moves? Is also this smart? Can crowd-sourcing really work like this? Let us know your thoughts at the Feedback button below.

Recent Feedback

This is a very innovative idea! A controlled roll out would be great. Maybe this would be most successful at first in small towns or in retirement villages and the like. I'm enthusiastic to hear more about crowd sourcing.

Pat Bayers
Argosy University
Apr, 04 2013