Walmart To Go is Webvan 2.0

Have we finally broken the barrier to same day delivery?

During the dotcom boom, Webvan and Peapod were going to change the world and when things went bust and both companies had to deal with the realities of massive infrastructure and overhead with little to no sales by comparison. Peapod got picked up by Stop & Shop and Webvan imploded, and is now just a Wikipedia page.


Fast forward over a decade and Amazon has made lots of noise about same delivery service. If you are a retailer, you should be scared, very scared. In fact if you are the largest retailer like Walmart, you should be especially concerned.

This of course explains why the company is delving into the same day delivery service with a few toes with its new Walmart To Go “Beta” initiative. It is interesting to note that although the company will ship a variety of merchandise the title tags on the company’s associated pages say “Walmart Groceries.” Looks like it may be time to update these. Partnering with UPS you will be able to get lots of fun and exciting Walmart merchandise without leaving the couch if you live in Northern Virginia, Philadelphia, Minneapolis or Silicon Valley/San Francisco.

You know what’s missing from the list? New York, Chicago and a number of other metro areas where you would think delivery services of this type would be easier to pull off.

But regardless, New York has a service like Fresh Direct which already provides delivery of groceries – similar to PeaPod. Perhaps the thought is the large cities already have competition, making it smarter to focus on wealthy neighborhoods with limited options.

The concept of same day delivery shouldn’t be too hard to pull off. After all, it is a volume and pricing game. You can get your dry cleaning delivered in a couple of days and if you stay at a hotel you can get same day laundry delivery. Assuming a warehouse is located close enough, delivery of items should be easier to handle than cleaning clothes.

The problem of course is the long-tail nature of delivering an array of TVs within a few hours. Certainly a few pairs of socks are easier to get up a flight of stairs.

As tough as the internet has been on retailers until now, they haven’t seen anything yet.

If Walmart, Amazon and a host of delivery-only competitors like Postmates and Instacart are successful, companies like Toys R Us are going to face difficult decisions. Will they partner with these last-mile companies, build their own networks or work out a deal with UPS? The issue of course boils down to logistics and how much inventory you want to have in various locations.

The challenge for retail going forward will be how much inventory do you want to carry in various warehouses and/or how well you can connect your retail stores to the shipping company’s order processing and delivery systems.

Perhaps the most amazing thing about this news is the Internet is all about speed – we can get access to infinite information without leaving our homes or offices. But when shopping, the internet slows us down as we can wait for days or even weeks to get the items we order. Now, it seems we are going to have a future where the internet could be as fast as or even faster in delivering items than it would take us to get showered, changed, into the SUV and down to the store ourselves. I feel most comfortable calling same-day-delivery via the internet, Webvan 2.0. How about you?

One last thought – many union workers fought tooth and nail to keep Walmart out of Brooklyn, New York but all they really did is harm their local community by depriving them of the 200 net jobs. All Walmart has to do now is ship product from a nearby location and have access to the same customers!

This is just another example of how free markets disrupt business in ways you can’t anticipate and the resulting unintended consequences can often be tough to swallow.

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