In a previous post by Megan Connell, Walmart’s exploration of new shipping methods as part of its expanded online shopping focus was discussed. Walmart is making a big push to try and cut transportation costs and gain an edge over Amazon and other online retailers. Walmart knows one advantage they have over online retailers is their 4,000+ physical store locations. In an effort to exploit this advantage, Walmart has decided to ship some online orders directly from these brick-and-mortar stores, which in many cases can be much closer to homes than their regional distribution centers. The company has rolled this concept out in about 25 stores thus far and plan to have it in place in over 50 stores by the end of the year.
As Megan mentioned, Walmart currently has to pay more, and thus charges more, for shipping products online, due to its use of typical carriers like FedEx and UPS to deliver goods. One way it has attempted to supplement this, and reduce some of the charges, is through the creation of their own proprietary service, called Walmart-To-Go, for same-day deliveries. This proprietary shipping system is currently being tested in five metropolitan areas and utilizes Walmart’s own delivery trucks.
In an attempt to really bring the fight to Amazon and similar competitors, Walmart wants to take its local shipping ideas one step further. It is considering a plan to have store customers themselves deliver packages to online buyers. The company is trying to capitalize on a relatively new phenomenon called “crowd sourcing.” Crowd sourcing is when a company gets a large project accomplished, not from a massive effort from a select few, but from the minimal efforts of a very large group of people -- a positive version of “death by a thousand blows”, if you will. Crowd sourcing is typically performed by an online community, and physical participation is not yet common. By inviting its shoppers to “rent out” space in their cars and deliver online purchases to their neighbors, Walmart would take a pretty big leap into unknown crowd sourcing territory. It would also offer a discount on the delivering customer’s shopping bill, which in theory would cover the cost of their gas and time. Walmart believes that, of the millions of customers that go to their stores each week, a substantial portion of them will sign up, tell Walmart where they live, and be able to drop off packages for online customers who live somewhat near their way home.
Getting involved in this type of service could additionally lower Walmart’s shipping costs as well as shorten the delivery lead times. It opens the company up to a slew of legal ramifications, however, in addition to providing plenty of opportunities for theft or fraud. Drivers for the main carriers like FedEx and UPS are fully insured, whereas these customer-delivered packages would be delivered by complete strangers, presumably bound only to a code of honor. Whether or not people would want to have their online purchases delivered by complete strangers may depend, in part, on what those items are. Certain people may not feel comfortable with having their 12 pack of Fruit of the Looms undergarments being delivered by their neighbors. But then the question arises why they are ordering those online from Walmart to begin with…
Wall-Mart plans to test this initiative out within the next two years in a metro area near you. I am excited to hear some of the stories that come from this initiative, as well as your comments on the policy in general. Feel free to leave those below.