Deliveries are getting faster all the time, and consumers are getting used to being able to order an item and feel confident that they’re going to receive it within a couple of days, or even quicker.
Home Depot and Walmart are two giants of commerce, and both of the companies have experienced growth in recent years. Home Depot’s revenue grew by over $20 billion between 2020 and 2021.
Home Depot decided that their best bet to improve their delivery service was to contract Walmart, and to take advantage of the company’s huge network of stores and fulfillment centers.
Consumers expect deliveries to continue to get quicker, and the market size in same-day deliveries is continuing to grow. The forecasted growth below, sourced from Statista.com, shows that the market is expected to vastly increase in size by 2027, and represent over 26.4 billion dollars worth of sales.
In a statement, Stephanie Smith, Home Depot senior vice president of supply chain, strongly hinted at the company’s goal of allowing their customers to order online and have their items within 24 hours: “This partnership brings us even closer to our goal of offering same-day or next-day delivery to 90 percent of the U.S. population” she said in a statement.
The partnership between Home Depot and Walmart has been planned for, as Walmart has launched a white label delivery service to take advantage of the fact that they have had to build a huge logistics network.
Walmart is a huge company, there are almost 5,000 stores in the US. It makes sense that they should use their incredibly fast logistics network. Home Depot is not necessarily a direct competitor, and it is easy to see why Walmart has allowed them to tap into the delivery network.
Walmart’s GoLocal delivery service offers both same-day and next-day delivery. The deal is also a way for Walmart to diversify their income. By creating a line of business that doesn’t rely on sales from customers, and effectively turns their logistics network into a B2B service that can be used to build their empire further.
The Walmart service is seen as closer to Uber and DoorDash rather than postal services. The pandemic has created even more of a demand for incredibly fast deliveries. While people may be getting used to deliveries of food and drink within hours, or even minutes, this is one step towards DIY materials arriving at your doorstep within no time at all.
Home Depot works with a number of different vendors for delivering their products. Traditionally, the DIY industry has relied on people visiting. Often, people are popping into the store due to the fact that they need supplies quickly, to make a repair or continue their decorations.
Waiting weeks for delivery doesn’t really work if you need tools, nails and bolts to fix something around the home.
That’s why Home Depot is trying to work with new partners. In 2018, they began working with Roadie, a door-to-door delivery service.
Walmart’s GoLocal is one of a number of delivery methods the company uses, and the transition to super-fast deliveries will spread to every area in the US in 2021 and beyond.
When a consumer goes through the process of checkout, they’ll see which products can qualify for the quickest forms of delivery. An $8.99 delivery fee is charged for using same-day or next-day deliveries. Rather than braving the DIY stores to get the materials you need, you can order, and know that you’ll be able to make the repairs on the same day. Interestingly, the deliveries will not be made by Walmart-branded vehicles.
There are limits to using this form of delivery. You can read more about the GoLocal service here.
In short, this service relies on cars, so you may not be able to use it to order large items like drywall or certain large tools. The larger the items you want to purchase, the less likely it is that you will be able to get this super-fast delivery.
Home Depot doesn’t seem to be planning to move exclusively to the Walmart delivery network. A company statement explained the goal the company has of “building a comprehensive, innovative delivery network to provide customers with same-day or next-day delivery options no matter the product or project.”
Walmart’s GoLocal service works like an Uber for delivering virtually any standard-sized e-commerce item:
GoLocal dispatches unbranded vehicles and drivers without specific Walmart uniforms. The idea is that the delivery service lets companies keep their relationship with customers without appearing as a subsidiary of Walmart.
Home Depot became the first nationwide brand to work with Walmart’s GoLocal service, but don’t be surprised to see more companies tap into this logistics network.
Walmart’s CEO John Furner spoke about the partnership:
“We’re honored to work with The Home Depot in our shared goal of making fast and reliable local delivery available in every community we serve, including rural and suburban areas, where we both have a strong retail presence.”
Of course, for Walmart, one of the huge benefits is increased revenue, and diversifying their income by monetizing the logistics network they have largely built for their own company’s needs. The courier and local delivery market size is $126.2bn in 2021, and this is expected to continue to grow. Walmart has made a smart play to tap into some of this income.
Walmart’s delivery service is enviable. The option to access deliveries within 24 hours, or a couple of days at the latest, is hugely appealing for companies who may otherwise have to opt for slower delivery methods, especially in rural areas.
Walmart’s incredible system is built to service their own customers. As their website explains, “approximately 220 million customers and members visit approximately 10,500 stores and clubs under 48 banners in 24 countries and eCommerce websites.” Now, third-party companies can tap into this network...at a cost.