Out 4, 2017
Walmart Buys Logistics Startup to Enable Same-Day Delivery in New York
Walmart (WMT, +1.01%) said on Tuesday it is gearing up to offer New Yorkers same-day delivery including grocery packages. It bought a Brooklyn-based logistics startup to help it do this.
The discount retailer, locked in a fierce battle with Amazon.com (AMZN, -0.22%) to shorten the time it takes to get customers' packages to their homes, last week acquired Parcel for an undisclosed amount "smaller than previous acquisitions" Walmart has made this year ( which include Bonobos, Moosejaw, and Modcloth), the company said in a blog. Recode reported the acquisition price was less than $10 million, citing sources. Target (TGT, -0.58%) in August made a similar acquisition, buying Grand Junction, a San Francisco-based startup that connects retailers and other distributors to a network of more than 700 carriers across North America to enable same-day delivery.
"We plan to leverage Parcel for last mile delivery to customers in New York City—including same-day delivery—for both general merchandise as well as fresh and frozen groceries from Walmart and Jet," the company said in a blog, referring also to e-commerce retailer Jet.com which it bought last year for $3.3 billion.
Parcel's customers include Bonobos and meal-kit services like Chef'd and Martha Stewart's Martha & Marley Spoon, and will continue to serve current clients, Walmart said. Founded in 2013, Parcel is a so-called "last-mile" delivery platform that operates around the clock and delivers in as quickly as two-hour windows.
The move comes just weeks after Amazon.com completed its acquisition of Whole Foods, which has a large presence in New York City and will likely help Amazon accelerate grocery delivery. And Walmart, whose e-commerce grew 63% last quarter, is looking to keep pace with Amazon, whose Prime members can get free two-hour delivery on a limited assortment of goods, as well as same-day delivery for free on many items.
What's more, same-day delivery is a way for Walmart to get more business from New York City customers, a market of 8.5 million people that doesn't have a single Walmart location.
By Phil Wahba