Walmart tests delivery service made by own employees

In its latest effort to compete with online giant Amazon, Wal-Mart is testing a delivery service using its own store employees, who will deliver packages ordered online while driving home from their regular work shifts.

The “associate delivery” program would use Wal-Mart's 4,700 U.S. stores and roughly 1.2 million employees to speed delivery and cut costs, the company said Thursday. The announcement came just a day before the company's annual meeting.

"Our stores put us within 10 miles of 90% of the U.S. population,'' Marc Lore, president and CEO of Walmart eCommerce U.S.. said in a blog post announcing the pilot. "Now imagine all the routes our associates drive to and from work and the houses they pass along the way. It’s easy to see why this test could be a game-changer..''

The idea behind it is simple, “to cut shipping costs and get packages to their final destinations faster and more efficiently, to create a special win-win-win for customers, associates and the business,” as per the blog.

The new service is currently underway at two stores in New Jersey and one in Arkansas. Packages are ferried from Walmart fulfillment centers to the stores, where employees can volunteer to deliver them.

The plan is similar to what Uber has done – use existing workers driving their own cars in order to create a vast network with little upfront cost. A feat similar to how Uber created a ride-hailing service without actually owning any cars.

Ravi Jariwala, a Wal-Mart spokesman, said all those employees driving home represent a “very dense web” of potential delivery locations for the company.

Hundreds of packages have been delivered as part of the new employee delivery pilot, and Walmart says that in many cases items promised for delivery in the two-day window are being dropped off at a customer's home in half that time.

Workers can opt in to earn extra money by making deliveries using their own cars. They’re assigned packages by a software-based on where they live so the route aligns with their commute home. Once they are done working at the store for the day, they pick up the packages from the backroom, load them into their vehicle, enter the delivery addresses into the GPS on their phone and head towards home.

Still, Lore wrote, "I’m excited to continue exploring more ways to bring our digital and physical strengths together to serve customers."

Walmart’s initiative would narrow delivery times and could result in significant cost savings, though the company didn’t provide exact estimates. However one thing is for sure – the lines between internet and brick-and-mortar commerce are slowly blurring as players try to accommodate a variety of shopping preferences.