Walmart announced Tuesday the launch of GoLocal, a delivery service that will deliver goods from local retailers directly to customers.
According to the company, shipping will begin by 2021. The delivery fleet will include more advanced technologies such as drones and self-driving cars.
CNBC's Tom Ward, senior vice-president of Last Mile at Walmart, stated that "it's about bringing those capabilities that we have been laser-focused upon building and connecting for customers to life for both national and local businesses."
Walmart stated that GoLocal would be a white-label company, which means deliveries won't be made using Walmart-branded vehicles. It will offer two-day delivery and competitively priced shipping, as well as two-hour delivery. Delivery will be handled by associates, gig workers, and sometimes other delivery companies.
FedEx and Walmart are currently partners for online parcel delivery. The company did not specify if FedEx would use GoLocal.
Ward stated that the company will be looking for innovative partners to deliver its products, such as Cruise, an electric vehicle startup that self-driving vehicles, Waymo, and Nuro. Drone delivery will be another focus with partners like DroneUP, another company Walmart invested last year, and ZipLine.
Ward stated, "What we are excited about is that we scale this and have all these different disruptive technology that bring in last mile work at Walmart."
Walmart has spent five years improving its ability to deliver products to customers. It acquired Jet.com, an e-commerce startup, for $3.3 billion in August 2016. Walmart's grocery delivery service was launched in March 2018. It delivers groceries to customers who order from Walmart stores. Walmart Fulfillment Services was launched by the company in February 2020 to match the growth of other marketplace-focused sites like Amazon and Shopify.
Jet.com was discontinued by the company in May 2020. However, CEO Doug McMillon said that the acquisition helped Walmart expand its delivery network.
Amazon Shipping was a similar service that was launched in 2018 and was intended to be competitive with FedEx and UPS. However, it was suspended in June 2020.
David Vernon, senior transportation analyst at Bernstein, stated that a local delivery service provided by a retailer is unlikely to have a significant impact on FedEx or UPS revenues.
Vernon stated that the local delivery market is home to 230,000 companies and competes in every American city. Vernon spoke on CNBC. There are two national parcel networks. There is some overlap between them; businesses are shifting to local businesses. However, it is not the same thing in the end.
Walmart stated that GoLocal has agreements with several national retailers and will accept applications for new partners starting Tuesday.