Walmart and Home Depot
Kena Betancur | VIEWpress | Getty Images; Scott Mlyn | CNBC
Home Depot is hiring Walmart to deliver paint, tools and other online purchases to customers’ doors.
The two retailers announced the partnership Wednesday. The companies declined to share terms of the deal or the length of the contract.
The home improvement retailer is the first retail client to sign up for Walmart’s new delivery business, GoLocal. Walmart launched the business in late August, with plans to pick up customers ranging from local stores to national players and make money from last-mile deliveries, similar to a third-party service like Instacart. Deliveries are made by gig economy workers who use Walmart’s delivery platform, Spark Driver.
Walmart will begin the deliveries at select stores in New Mexico in the next few weeks, and then expand to other markets across the country before year’s end, two companies’ spokespeople said. The same-day and next-day delivery service will be limited to items that can easily fit into a car, such as fasteners, boxes of nails or paint brushes. Those that qualify will have that option offered at online checkout.
For Walmart, the delivery business provides a new stream of revenue and a potential way to gather additional insights about consumer purchasing patterns. The big-box retailer has looked beyond retail to drive growth, as it opens health clinics, creates a fintech start-up and ramps up its advertising business.
The big-box retailer is betting that its huge footprint will give it an edge over delivery partners. It has a more than 4,700 stores scattered throughout the country, including in many rural areas. About 90% of Americans live within 10 miles of a Walmart store, according to the company.
For Home Depot, the delivery agreement is another way to shorten the time between when a customer places an online order and receives an item. It brings the company a step closer to its goal of offering same-day or next-day delivery to 90% of the U.S. population. The retailer is investing $1.2 billion in its supply chain, including opening a network of flatbed distribution centers that can quickly get big and bulky orders to the construction site of a home professional or replenish inventory at stores.
Home Depot, which has 2,300 stores, has other ways shoppers can retrieve online orders, too, such as curbside pickup, in-store lockers and scheduled deliveries to homes and jobsites. Its e-commerce sales grew by 86% in fiscal 2020, which ended Jan. 31, compared with the year prior.
