How Walmart Is Speeding Up Its Delivery Processes To Compete With Amazon

In a move to match up to the Amazon's convenient options for web purchases, Walmart announced Thursday it will allow store employees to opt for a delivery service program in which they would drop packages at customers' homes while going back home, reports said.

Walmart executives pointed out the idea behind this move was to cut costs on the so-called last-mile of deliveries. When the multinational retail giant's employees drive to customers' homes, the most expensive part of the fulfillment process would be taken care of, the Washington Post reported.

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Both Walmart and Amazon are competing for speeding up their delivery systems for online orders in the country. Walmart's announcement comes amid the retailer doubling down on online business, where sales grew 63 percent in the first quarter this year. The largest retailer in the U.S. has worked towards increasing its online share in the country in 2016.

According to the Walmart website, it inked a $3.3 billion to acquire Jet.com — an e-commerce company headquartered in Hoboken, New Jersey — last year. The company took this aggressive step to compete with Amazon, which accounts for about 33 percent of U.S. online sales, the Post reported.

Around 90 percent of the U.S. population reside within 10 miles of a Walmart and the retail giant is probably using these locations as shipping hubs to challenge Amazon's online delivery services. By utilizing their own workforce and their vehicles, Walmart could create a vast network with lesser upfront cost, similar to how Uber created a ride-hailing service without owning any cars last year, Bloomberg reported.

"Imagine all the routes our associates drive to and from work and the houses they pass along the way," said Marc Lore, who took over Walmart's e-commerce operation last year after the retailer purchased his startup, Jet.com. Lore added: "This test could be a game-changer." He also said the move could curtail delivery times as many online orders in tests have been delivered overnight using store employees.

Apart from speeding up delivery procedures, the new program is also reportedly seen as a way for employees to earn extra income, although there were few details on how they would be paid.

Reports said citing Walmart spokesman Ravi Jariwala that Walmart employees can sign up for up to 10 deliveries per day using a company app. The employees can also set size and weight limits on delivery packages. However, if there are not enough employees to make a delivery, carriers like UPS and FedEx would fill in.

Meanwhile, the Seattle-based Amazon has also taken steps in recent months to speed up delivery. Last year, it reportedly unveiled its first branded cargo plane that would take more control of its delivery process. It was one of 40 aircrafts the company planned to lease.

It has also created an on-demand network of drivers — Amazon Flex — similar to Uber or Lyft.