Walmart-Instacart partnership rivals Amazon with same-day delivery pilot
Key Points
Instacart is fulfilling same-day deliveries at four Walmart locations.
If the pilot expands, it could bolster Walmart's digital business and help Instacart attract more customers.
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Instacart is providing same-day grocery deliveries at three Walmart stores in California and one location in Oklahoma, CNBC reports. This marks the first time consumers can order groceries from Walmart, the largest grocer in the US, via Instacart's platform, though Instacart does already offer groceries from Walmart-owned Sam's Club. Instacart will deliver a variety of products from Walmart, including groceries, home decor, and electronics.
If the partnership expands to more of Walmart's sprawling store network, it would represent two leading online grocery players joining forces just as the industry takes off. US consumer adoption of online grocery services surged during the coronavirus pandemic as consumers tried to avoid stores to limit their chances of contracting the virus.
This caused demand for Walmart's and Instacart's online grocery businesses to soar, positioning them as top online grocery players alongside Amazon and Target. Deepening their collaboration would allow each company to take advantage of the other's strengths, potentially helping them battle online grocery providers, attract customers, and rack up online grocery sales well into the future.
Instacart's leading online grocery marketplace and Walmart's status as the US' top grocer would make them a formidable pair, and both would benefit from an extensive partnership.
Offering grocery delivery via Instacart would help Walmart reach more online grocery shoppers and outsource its delivery orders. Instacart's marketplace features over 25,000 stores — and by joining the platform, Walmart can compete with them for orders from online grocery customers, potentially boosting its sales. And if Walmart chose to let Instacart handle its delivery orders, it could avoid directly dealing with delivery expenses and instead focus its efforts and resources on its curbside and in-store pickup operations, which are key for consumers who want to avoid delivery fees and waiting to receive their groceries. But with Walmart reportedly set to debut a subscription service that promises free same-day delivery, among other perks, it'll need to consider if Instacart and its delivery fees can fit into its offerings.
Adding Walmart stores to its platform would enable Instacart to reach a huge swath of customers, potentially making it the premier online grocery provider in the US. Instacart already has delivery partnerships with top grocers like Kroger, Costco, Albertsons, and Publix, and adding Walmart to the mix would help it reach Walmart's existing base of grocery customers, likely boosting its sales. Fulfilling orders for Walmart and a number of other leading grocers would make Instacart's marketplace a convenient online grocery provider for consumers throughout the US, potentially helping Instacart convince consumers to turn to it rather than to Amazon or grocers' proprietary online grocery services.
First Reported by Daniel Keyes @ businessinsider.com