Wal-Mart Tries Using Store Workers to Deliver Online Orders

By Sarah Nassauer Features Dow Jones Newswires

Someone in a blue vest could deliver your next online purchase.

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Wal-Mart Stores Inc. is testing a program in which store workers deliver some orders placed on Walmart.com or Jet.com, a sign of how the retailer hopes to use its 4,700 U.S. stores to its advantage in its battle against Amazon.com Inc.

The test is small, active for just a few weeks in an Arkansas store near Wal-Mart's corporate headquarters and two New Jersey stores near the offices of Jet.com, the discount retailer Wal-Mart bought for $3.3 billion last September. A spokesman said only a few hundred packages have been delivered by store workers so far.

But Wal-Mart's idea is significant as the largest private employer in the U.S attempts to head off Amazon's continuing efforts to offer shoppers fast and convenient ways to receive goods at home, including one-hour delivery on thousands of products in 45 cities.

"Imagine all the routes our associates drive [while going] to and from work and the houses they pass along the way," said Wal-Mart U.S. e-commerce chief Marc Lore in a blog post.

Wal-Mart store workers who have a car and pass a background check can choose to deliver up to 10 packages a day, using a mobile application that suggests orders that would be convenient for their route home. They are paid for the time spent making deliveries, though Wal-Mart declined to say how much they earn or if they remain on the clock during those times. Shoppers won't know at the time of purchase who will be delivering their order, the spokesman said.

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The final leg of an order's delivery to a home, known as the "last mile, " is often the most expensive and operationally challenging, say logistics experts.

Most e-commerce companies have cobbled together solutions, simply paying FedEx Corp. or United Parcel Service Inc. for faster shipping or, like Amazon, hiring local couriers. Some, including Wal-Mart, are trying drivers from Uber or Lyft to make deliveries. Companies like Instacart, a grocery delivery service, use an app to offer shopping and delivery jobs to anyone willing. Logistics experts say autonomous vehicles or drones could eventually make last-mile delivery cheaper.

Wal-Mart's plan could face hurdles. If workers remain on the clock during delivery, some part-timers could become full-time and so qualify for health care, increasing labor expenses. Many workers don't commute by car, opening the door for discontent among those who can't make extra money through deliveries. The system could also strain locations already busy with in-store pickup and other e-commerce services linked to stores.

After years of lagging online sales, Wal-Mart has become more willing to try new e-commerce ideas. Mr. Lore took the helm of the company's U.S. e-commerce efforts last September, quickly buying up several smaller online companies and introducing new pricing and shipping offers. In the latest quarter, Wal-Mart's U.S. e-commerce sales grew 63%, including sales from Jet.com and other recent acquisitions.

Write to Sarah Nassauer at sarah.nassauer@wsj.com

(END) Dow Jones Newswires

June 01, 2017 13:35 ET (17:35 GMT)