Walmart this morning said it has acquired Parcel, a New York company that does scheduled same-day deliveries of packages and meal kits, accounting for the “last mile” of the shipping process.
The deal, which Recode valued at less than $10 million, bolsters Walmart’s ability to offer rapid delivery options in New York, something Walmart subsidiary Jet.com has already been testing. Walmart’s rival Amazon offers same-day delivery in New York and other cities, as well as safe drop off spots through Instant Pickup locations and Amazon Lockers.
“Customers’ expectations around delivery and what is possible have changed significantly in the past couple of years. Whatever they need and however they’d like it, we aim to provide – including the ability to offer last-minute ordering with same-day delivery service,” Nate Faust, senior vice president of Walmart’s U.S. e-commerce supply chain, said in a Q&A on Walmart’s website.
Walmart is working to become a major player in urban areas like New York City, calling the Big Apple the company’s top market, and rapid delivery is an important piece of that plan. Parcel receives packages from a variety of partners at its Brooklyn warehouse and uses routing algorithms and a fleet of vans driven by employees to offer same-day, overnight and two-hour package delivery windows. Parcel gives customers live updates throughout the process.
With the resources of Walmart behind it, it’s easy to see Parcel’s service expanded to other big cities, helping the company build out a network akin to Amazon’s Prime Now rapid delivery service.
Walmart has dropped some serious cash on deals to help grow the company’s online presence. It started with Jet.com, which Walmart bought for $3.3 billion. Then, on the same day Amazon announced its blockbuster deal to buy Whole Foods Market for $13.7 billion, Walmart announced a big acquisition of its own: $310 million for clothing company Bonobos.
Walmart has invested heavily in logistics and delivery as one of the primary fronts in its battle against Amazon. At the end of January, Walmart introduced free two-day shipping on millions of items for orders over $35.
In addition, Walmart is investing in grocery pick up and delivery programs to complement online shopping and grocery, which is available in more than 900 U.S. stores. The company is testing a new program in a few locations where in-store employees can sign up to deliver orders directly to customers.
Walmart will soon have approximately 100 “automated pickup towers” in stores across the U.S., where customers can quickly pick up orders they made online. Walmart is even testing a service where customers can have their food delivered to their homes and put away in the refrigerator.