Walmart moves even more towards Amazon and now also becomes a delivery service
After retail chain and internet marketplace, American Walmart is now also becoming a delivery service. In an effort to keep up with online competitor Amazon, the company announced its new GoLocal business on Tuesday. This means that other retailers and manufacturers in the United States will soon be able to use the logistics of the world’s largest retail chain for a fee.
According to Tom Ward, who is responsible for consumer delivery at Walmart, GoLocal is a “white-labeled‘. This means that, although products ordered from third parties go to the customer through Walmart’s logistics centers, they do not look like packages from this retail giant. The consumer orders directly from the seller, and orders are delivered in the sender’s packaging. It is even possible for GoLocal users to have Walmart vans branded with their own logo.
The latest initiative is clearly different from Walmart Marketplace, the internet marketplace that the company started back in 2009. There, large and small retailers can offer their goods under the Walmart flag, as is also possible at Amazon and in the Netherlands at bol.com, and the handling of the sale is largely in the hands of the American group. At GoLocal, “our users’ brand is central,” Ward told US media.
Flexibility is paramount, the company says. GoLocal is for sellers of all sizes: a local bakery, but also a national car dealer that sells parts. Delivery can take within a few hours, but also two days. Rates for that will vary on a case-by-case basis, Ward said.
In return for The Wall Street Journal the Walmart executive stressed that the delivery service is also available in suburbs and rural areas, “where other delivery services struggle” to get to. GoLocal will officially launch in a few months. According to the company, contracts have already been signed with “a number of” retailers. Walmart wouldn’t say how many and with whom.
Largest retail company in the world
With the launch of GoLocal, Walmart hopes to tap into a new source of income. The supermarket and department store chain has been known as the largest retail company in the world since the 1990s, with about 10,500 branches and 2.3 million employees. That position is coming under pressure now that consumers are increasingly making their purchases online, a development that only accelerated the corona pandemic.
Last week reported The New York Times even that Walmart would have already been overtaken by Amazon. Based on analysts’ calculations, the paper wrote that in the twelve months to the end of June, consumers spent more money in Jeff Bezos’ e-commerce business ($610 billion) than at Walmart ($566 billion).
This turnaround is not yet visible in the turnover figures reported by the companies themselves, and Walmart is still significantly larger. But that’s because Amazon doesn’t include revenue from others through the platform in its figures — only the commission it earns on it. According to the analysts, total sales via Amazon would have increased by 200 billion in a year. Walmart’s sales increased by $24 billion in the same period.
The fact that Walmart online has a significant gap with Amazon is also apparent from other figures. Walmart’s Marketplace has 70,000 affiliates offering more than 75 million products. Amazon’s platform is estimated to be used by 2 million merchants, selling more than 350 million products – not only in the US, but also abroad.
Walmart doesn’t just accept that. For example, the group tries to lure sellers at Amazon by charging significantly lower sales rates. Last month, Walmart also announced a partnership with software company Adobe: together they will also offer the technology that the retailer uses for internet sales to retailers who use Walmart’s marketplace.
Where this group is making new attempts to earn money from sales via the internet, Amazon is taking the opposite route. The internet company already bought the American supermarket chain Whole Foods four years ago, in order to also gain a position in the market for daily groceries. In addition, Amazon has opened more than twenty bookstores in the US in recent years.
In fact, Bezos’s business is now rumored to be considering expanding into the type of stores most affected by the e-commerce giant’s rise: department stores. The Wall Street Journal reported at the end of last week based on sources that Amazon is looking at branches in the states of Ohio and California, before expanding further. In those department stores, the company would like to focus on selling Amazon own-brand products.
GoLocal is a new signal that the two largest retail companies in the US are moving towards each other. Because Amazon has also been focusing more on the delivery of products ordered from competing websites in recent months, business newspaper noted Financial Times recently on. The internet company also recently started a trial in which sellers on the platform can have their products delivered in packaging without a logo.