(Reuters) – Walmart Inc and logistics company Deliv pulled the thorn in an important food delivery partnership on the same day, facing a stop in the retailer's race against rival Amazon. com Inc to deliver groceries to customers' homes.
FILE PHOTO: the Walmart logo is seen outside one of the stores in Chicago, Illinois, USA, November 20, 2018. REUTERS / Kamil Krzaczynski / Photo of the file
The biggest retailer in the world has begun to strengthen the its partnerships with a third-party courier companies reach consumers in 100 cities in the United States last year, after failing to use Uber and Lyft for the distribution of foodstuffs, and struggle in trying to use their own employees to deliver the goods.
Deliv, who was one of Walmart's first partners with pilot programs in Miami and San Jose, served the dealer on 90 days' notice, and the two companies stopped collaborating in late January, according to two family members with the situation.
Walmart confirmed the previously unreported decision and stated that it is still cooperating with seven delivery companies, including DoorDash and Postmates, four of which were registered in January.
People familiar with Walmart's partnership with Deliv said Deliv drivers had to wait 40 minutes or more often to collect food orders when they showed up at the store. One reason is that Walmart gives customers priority over couriers during regular hours, which has complicated collaboration.
Sales at Walmart "were a huge problem," said one of the people with direct knowledge of the matter, adding that the retailer can not "process online purchase orders fast enough."
Deliv declined to comment. Walmart spokesperson Molly Blakeman told Reuters that the retailer and Deliv have decided to end the partnership. "As with any pilot, the intent is to learn." Finally, with Deliv, we came to the conclusion that although their platform is a good delivery option, it was not the best solution for our program in this moment. "
Blakeman said that the same-day grocery delivery is currently available in 800 more than 5,000 US stores and warehouse clubs, and the retailer plans to add another 800 this year.
Deliv offers same-day deliveries with gig drivers, a model that can work well with faster order processing and better ability to forecast demand and robust volumes. Walmart now works primarily with restaurant delivery companies that deliver an order as and when it is generated, said one of the sources.
Both sources said order volumes were low in many markets, and one source said orders had to be delivered over long distances, with the result that both Deliv and Walmart were losing money.
"When the partnership with Deliv was reached, the hope was that the demand would be stronger than now," said one source.
Deliv operates in 1,400 US cities, leveraging local haulage networks to deliver same-day paid packages to a number of retailers, from Home Depot Inc. to Kohl & Co. Corp.
In October, he collected $ 40 million in a new round of financing from investors, including Google Alphabet Inc and United Parcel Service. In December, he signed 20 new retailers in the United States including Nike Inc and Nordstrom.
Deliv can process and deliver thousands of orders in an hour. Walmart in San Jose sometimes generated only a hundred orders a week, and there were problems in processing that volume through stores, said one of the sources. Walmart is working to solve problems in its stores to process orders faster, the source added.
Blakeman said that there were problems with the volume of orders in the market.
Sources also told Reuters that Walmart has completed a separate grocery delivery test since 2017, in which he collaborated with security company August Home and Deliv on keyless voices in buyers' homes, to deliver spending directly at your fridge.
Report of Nandita Bose in Washington; Editing by Vanessa O'Connell and Edward Tobin