Walmart buys Parcel in latest attempt to battle Amazon delivery machine
Walmart is trying to beat Amazon at its own game, and the company’s latest acquisition will boost that effort, at least in the New York City area. Walmart announced that it has acquired Parcel, a Brooklyn-based delivery company that specializes in scheduled and same-day package delivery of traditional items as well as groceries, meal kits, and other perishables. The acquisition price has not been disclosed by Walmart or Parcel, but a Recode report suggests that the deal closed at less than $10 million.
Parcel launched in 2013 to help city dwellers get their packages at convenient times. Signing up for Parcel meant you could schedule a two-hour window in which your package would be delivered. In metro areas like New York, it’s not unheard of for packages to be lost or stolen if delivered when the recipient is not around to accept it. Amazon’s apartment Hubs are the most recent attempted fix for this problem, but Parcel gives recipients more control over when their packages arrive. Parcel also sends live package updates via text message to the merchant and recipient, informing them of the location of the package through the last mile of delivery.
According to Walmart’s blog, Parcel will continue to serve its existing customers in the New York City area. Walmart will use Parcel’s infrastructure and knowledge of the New York metro area to help its same-day delivery efforts. Walmart purchased Jet about a year ago for $3 billion and now offers free, same-day delivery through Jet in some areas. Parcel will help Jet complete same-day deliveries in the New York City area soon, while also allowing Walmart to lower operating costs even while experimenting with new delivery methods. Walmart and Jet plan to deliver both regular merchandise and perishable groceries with Parcel’s help in the future.
This is Walmart’s latest attempt to get on Amazon’s level when it comes to distribution. Amazon already offers free two-hour delivery to Prime members for some common items as well as same-day delivery for a catalog of over one million items. While same-day and incredibly fast delivery may be more popular in big metro areas than other rural areas, it’s a huge market for online retailers to prove their usefulness and speed. Walmart is hoping that Parcel’s knowledge of the New York City area, along with its infrastructure that can support perishable and non-perishable goods, will help it compete with Amazon in one of the biggest retail markets.
But there are a lot of other ways Amazon gets products to customers, particularly in New York. Convenience is key, and Amazon has a network of delivery mechanisms, including Amazon Lockers and Instant Pickup locations. Depending on a shopper’s preference, buying last-minute essentials could mean placing an order on Amazon and walking to the Instant Pickup shop down the street to get it in minutes, or waiting for a delivery to arrive in two hours. Walmart’s efforts can only begin with Parcel as it will have to experiment with other convenient ways to get orders to customers as quickly as possible.