Walmart’s big bet on delivery is finally starting to bear fruit.
After years of effort and billions of dollars, the retailer is about to deliver to 95% of the American population within three hours, CEO Doug McMillon said on Thursday during the call for results in the company’s first quarter.
It is faster than Amazon (although the selection of Walmart products available for such fast delivery is smaller).
Not only is its delivery becoming wider, but the company has managed almost twice as many deliveries of three hours in the last quarter than this one year ago, helping its electronic commerce activity publish a quarterly profit for the first time.
Overall, Walmart now manages many more packages via its delivery network than a few years ago – something that the financial director John David Rainey called “densification”.
“Think of the opportunity to deliver a package to five houses in the street against a house in the street,” said Rainey. “As we grow, we continue to distribute these costs over more volume.”
Many Walmart customers are also ready to pay to have their purchases delivered in a few hours, added Rainey. Walmart already offers fast delivery on the grocery store, for example, via its Walmart + paying subscription program. Other buyers can pay fees between $ 7.95 and $ 9.95 for at least $ 35 grocery store.
Retail trade tends to be a low -margin business. Transforming a profit on delivery can be even more difficult.
But Walmart begins with something that few competitors have: a sprawling fleet of more than 4,600 stores that are stored with tens of thousands of items.
From there, Walmart has made new investments in recent years, including specialized realization centers, renovated retail stores and an increasingly automated supply chain to maintain stocks.
The company has also built – and redesigned – a series of applications for customers, workers and spark delivery drivers to make the order and realization more practical.
More recently, the company sells muscles of storage and delivery to other companies, as well as an increasing (and very profitable) advertising sales company.
These sources of income help Walmart maintain the delivery speeds quickly and costs low while earning money for the company.
All this is added to an increasingly effective delivery operation which, according to the company, was able to deliver bouquets of fresh flowers last minute to customers on Easter day and Mother’s Day – and probably also chocolates.
“This shows the relevance of convenience,” said Rainey.
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