Retail giant Wal-Mart is strengthening its relationship with taxi hailing service Uber to help it use speed as an advantage in delivering groceries against rival Amazon.
The retailer said Monday that the testing of the online grocery delivery service currently available in Phoenix, San José, Tampa and Denver will be extended to Dallas and Orlando increasing the test markets to six. The partnership with Uber is likely to roll out further into other markets. This is an important step for Wal-Mart whose food segment contributes 56% to its annual sales in the U.S.
Wal-Mart has previously been keen to get more of its customers to pick up groceries ordered online at thousands of its stores. However this service is only available in 900 locations. It’s therefore becoming apparent that being able to deliver is an option that many more customers will expect as competition from other retailers intensifies. German discounter Aldi for example, announced last week that it’s launching grocery home delivery service in select markets. More fierce competition is expected from Amazon, which is expanding aggressively into the grocery space by its acquisition of Whole Foods giving it a footprint in brick-and-mortar.
All this is aimed at addressing the convenience that shoppers expect in a super competitive environment and as vice president of e-commerce operations Mike Turner wrote in a Walmart blog post, “We’re working hard to find a way to get you fresh, quality groceries all while keeping a little more time on your calendar.” With Wal-Mart Stores announcing a rise in sales for the 12th straight quarter in the U.S., the grocery business is at the center of this stellar performance. It’s undoubtedly the best quarter in five years.
Uber’s involvement starts when a customer places their online order with Wal-Mart and is given the opportunity to choose a delivery option. Staff at Wal-Mart will then scan the items, pack them and call the Uber driver. The Uber driver will then come and retrieve the order and deliver it to the customer’s location.