Is the Walmart/Instacart pilot a sign of big delivery news to come?
The biggest retailer and the largest online grocery delivery service in the U.S. are teaming up in a pilot program that, if expanded nationwide, could have major ramifications for the industry as a whole.
Walmart and Instacart, which work together in Canada, have partnered in four local American markets with an eye toward future rollouts if the test is successful.
“For the first time in the U.S. Instacart now delivers from Walmart locations in three California markets — Los Angeles, San Francisco and San Diego — as well as Tulsa, Oklahoma,” an Instacart spokesperson said in a statement to CNBC. “The new partnership brings thousands of items — from groceries, alcohol and pantry staples to home decor and improvement, personal care, electronics and more — at everyday low prices from Walmart stores to customers’ doors in as fast as an hour.”
Both Walmart and Instacart have seen their businesses buoyed as increasing numbers of consumers have turned to them to conveniently and safely shop for food and everyday staples during the novel coronavirus pandemic.
Walmart posted a 10 percent gain in U.S. same-store sales during its fiscal first quarter as online revenues, driven by grocery pickup and delivery, jumped 74 percent.
The retailer is also expected to debut Walmart+, a rebranding of its Delivery Unlimited Grocery service with additional perks including unlimited same-day deliveries of groceries, fuel discounts, early access to promotional deals and more. The service, which was originally set to launch in March or April and pushed back due to the pandemic, will cost $98 a year.
Instacart, which saw orders skyrocket as much as 500 percent during the pandemic, grew its share of online grocery as high as 55 percent in the third week of May, up from about 30 percent in February, according to data from Second Measure.
The delivery service has accelerated its retailer partnerships since the beginning of the year and now works with more than 400 retailers representing more than 30,000 stores in North America. The service reaches more than 85 percent of households in the U.S. and more than 70 percent in Canada.
- Walmart and Instacart partner for same-day U.S. delivery in fight against Amazon’s Whole Foods – CNBC
- Will Walmart’s best shoppers ditch Amazon Prime for Walmart+? – RetailWire
- Has the pandemic proven Instacart’s business model? – RetailWire
- W+ Coming Soon – Walmart.com
DISCUSSION QUESTIONS: Do you see Walmart+ and Instacart deliveries being able to coexist or will the retailer choose one option over the other? What would be the ramifications of a national rollout of the Walmart/Instacart partnership for these two companies and the retail grocery industry as a whole?