In an effort to compete with e-tailers, Walmart is looking at a plan to have their store customers deliver packages to online customers. Currently, Walmart uses express carriers such as FedEx for online deliveries. So how would this (to be “crowd-sourced”) idea work? Walmart shoppers could register to drop off packages to online customers who live along their route back home, in exchange for a discount on the customers’ shopping bill, about the cost of their gas in return for the delivery of packages.
Before implementing the plan, they need to consider things like theft, fraud, licensing and insurance. It might be a year or two and might not initially cover all 4,000+ U.S. Stores. Walmart wants to be more competitive against e-tailers like Amazon.com.
Other delivery options are:
Company owned vehicles operated by company employees.
Contracted third party home deliverers.
Lockers or a desk in a Walmart store.
Pickup at a neighborhood store (not a Walmart) close to customer.
The post office.
Walmart strategy is to leverage its huge investment in stores in the e-fulfillment processes, hoping this will reduce transportation costs and therefore giving it a huge advantage over the store-less Amazon. Sounds like e-tailing might become a larger part of the company’s retail strategy. The dramatic rise in global ecommerce sales (more than 21 percent last year to top $1 trillion) is something the “big box” stores like Walmart cannot ignore. In the North American market, ecommerce accounted for more than $364 billion in sales in 2012. But it comes with a lot of operations and supply chain management issues too.
One of Walmart’s key assets in comparison to online companies is its huge physical storefront infrastructure. But, as ecommerce becomes more popular, that advantage is minimized. Walmart’s strategy must be to capitalize on its physical storefront advantage while also maximizing ecommerce profits. Using this asset, Walmart would be able to make its supply chain more efficient by minimizing the number of shipping end points. Most ecommerce-only operations ship products to centralized warehouses, and then distribute goods to individual customers. Walmart hopes to do is keep its shipping process so that goods are sent only to stores. This keeps their already very efficient store distribution system in place (yet another asset they own).
Both Walmart plans are challenging. The crowdsourcing model (In this case, the crowd would be the thousands of customers that shop in a Walmart store every day. Walmart shoppers who want to be part of the program would tell Walmart where they live. The stores would use mapping technology to see whether there are on-line orders needing delivery that are on or near a given customer’s route back home) trusts customers to safely and quickly deliver goods to strangers instead of just stealing the item. With the locker-based arrangement, Web consumers are right back to where they do not want to be: traveling to a store maybe not close to their home.
No, the post office is not the answer. If it was, UPS and FedEx would not be the giants they are. Even in France, the French post office, La Poste, has been heavily criticised by a consumer watchdog.
In my case, I do not want to go to a “big box” store, I do not want to stay home to accept a package, I do not want to go to the post office and have them tell me that my package is still out with the mailman who left me a note, so Kiala provides an alternative to home delivery (and service return) of parcels. With Kiala, I can pick up my parcel when and where it suits me best! The “relay” concept is great: Kiala relays from the shipper to their warehouse, to their truck, then to a retail location in my neighborhood. In my case, it is a newsstand/FAX/copy center. A Cloud-based platform automates all unique movements of the parcel. I can follow the path of my parcel on the Internet and they sent a text message to my phone when my order is unloaded.
Anyway, for Walmart, almost anything is a lot cheaper than paying workers a livable wage (plus benefits) for the same job.