Walmart takes supply chain to the next level

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Walmart takes supply chain to the next level

By Gina Acosta - 10/03/2017

Walmart has acquired a same-day, last-mile fulfillment company specializing in perishable and non-perishable delivery to customers in New York City.

The company, called Parcel, also provides services such as scheduled evening delivery and custom text message notifications for high-growth e-commerce companies looking to differentiate their customer experience.

"Delivery is increasingly one of the most important elements for today’s online shoppers, as demands for speed, flexibility, and reliability continue to grow," said Nate Faust, senior vice president, Walmart U.S. eCommerce Supply Chain. "That’s why my team spends a lot of time thinking about ways we can make deliveries faster and more convenient for customers. Parcel is a proven leader in e-commerce package delivery, including taking fresh, frozen and perishable food, the last mile – that is, the last step in the shipping process as products make their way from a fulfillment center to your door."

Parcel has partnerships with several meal kit, grocery and e-commerce companies, and has delivered more than 1 million meals in the past two years. So Walmart's immediate plan is for Parcel to continue serving its existing clients and growing its customer base, Faust said.

"But I see even more upside for our own same-day deliveries. Jet has been testing free same-day delivery of certain orders to customers in New York City. We can build upon that and plan to leverage Parcel for last-mile delivery to customers in New York City – including same-day delivery – for both general merchandise as well as fresh and frozen groceries from Walmart and Jet," Faust added.

Parcel will become the last-mile courier for Walmart.com and Jet.com, the e-commerce company Walmart bought last year. Jet has been testing same-day delivery in New York, and Parcel will become the vehicle for that service’s expansion.

With the acquisition of Parcel, Walmart is poised to take on AmazonFresh, its same-day grocery service, and Amazon Prime Now, which delivers general merchandise, in the big NYC market.

According to Walmart, Parcel has built a technology platform from the ground up to automate their operations and provide clients and customers with live updates throughout the delivery process. From a warehouse in Brooklyn, Parcel receives packages destined for customers throughout New York City. Using routing algorithms, a fleet of leased trucks, and a professional, employee-based workforce, they’re able to quickly sort and load packages for delivery routes.

New York City is the top market for both Jet and Walmart.com, and because of the density of the area – along with the proximity of our fulfillment centers – it’s the perfect place for high-impact innovation. Born and bred in New York City, Parcel has developed unique expertise delivering to customers in a distinctly challenging and essential market. This acquisition allows Walmart to continue testing ways to offer fast delivery while lowering operating costs.

"Customers’ expectations around delivery and what is possible have changed significantly in the past couple of years. Whatever they need and however they’d like it, we aim to provide – including the ability to offer last-minute ordering with same-day delivery service," Faust said. "And while customers are looking for low prices, we also know they want convenient experiences that make shopping easier. It’s why we’ve focused on creating more options to meet their needs, such as our free two-day shipping to home, our pickup discount and free online grocery pickup service. It’s also the reason we’ve been testing a number of different innovations at Walmart and Jet to further enhance how we serve customers even faster, with programs ranging from associate delivery to in-building and in-fridge delivery with Latch and August Home. We’ll continue to explore more ways to give customers the freedom to choose how, when and where they receive their orders from us."