Walmart Inc is all set to increase its grocery home delivery services to about 100 cities from its existing six cities where they currently offer home delivery services for groceries to their customers. The decision comes as direct competition to its biggest rival, Amazon who is also expanding its home delivery services.
According to a Walmart spokesperson, the company is set to roll out their services to about 40 percent of US households before the end of 2018. All deliveries will cost about $9.95, and the minimum amount of an order they would accept would be $30. They will be hiring the services of Uber Technologies Inc to make the deliveries to their customers. They will also be adding more delivery companies in the future.
According to the Vice President of Digital Operations, Tom Ward said that they would be aggressively taking their projects forward. The new move will complement their already existing grocery pickup services that are already available in about 1,200 stores and will also be adding the services to more of their 1000 stores across the country. It will allow them to compete with the two hour home delivery services being offered to Prime Members of Amazon through their loyalty programs.
The new service will allow Walmart to have more of their customers purchase online where they would be able to spend more than they usually do in the store. After Amazon purchased Whole Foods last year, the competition in the grocery market has increased intensely. Walmart's rivals such as Amazon and Kroger Co are aggressively expanding their delivery services.
Amazon currently holds about 18 percent of the total online grocery market followed by Walmart at number 2 with about 9 percent of the total market share. After the revenue of Walmart slowed, experts questioned its strategy to compete with its competitors. The Walmart spokesperson said that they would be increasing the company's sales by 40 percent by the end of 2018. With their home delivery system being introduced currently, they are likely to be on the right track to achieve the numbers they have targeted.