Walmart's Depot Play Comes Right After Amazon Now | Fast Five Shorts
This Omni Talk Retail Fast Five segment breaks down Walmart’s quiet rollout of neighborhood delivery depots and why the retailer may be building the foundation for a new era of hyperlocal fulfillment.
Chris Walton, Kelly Carey, and Chad Lusk discuss how Walmart is leveraging its physical footprint to compete with Amazon’s growing delivery ambitions, why dark-store style fulfillment may become more common across retail, and what this means for the future of convenience and grocery delivery economics.
They also debate whether Walmart’s strategy could ultimately become more scalable than Amazon’s over the long run.
⏩ Tune in for the full episode here.
#Walmart #RetailNews #LastMileDelivery #RetailTechnology #Ecommerce
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Transcript
Potentially not to be outdone, Walmart is quietly piloting small neighborhood delivery depots of their own, converting vacant retail spaces into compact neighborhood level stockrooms designed to speed up home delivery across the U.S. according to a Financial Times report covered by the Retail Insight Network, Walmart has already established at least three of these facilities, branded Walmart Depots, over the past year in Dallas, New Jersey and Arkansas.
Speaker A:Each depot covers approximately 20,000 square feet, stocks high demand household items and is managed by a nearby Supercenter, which is also interesting to me.
Speaker A:The sites are not open to the public and are exclusively accessible to gig workers operating through Walmart's Spark delivery driver app.
Speaker A:Additional sites are under consideration in California, New York, Florida, Nevada, the Pacific Northwest and Virginia, with several earmarked in former Rite Aid, Walgreens and Goodwill locations.
Speaker A:Chad, I'm going back to you again.
Speaker A:I said you're getting all the Amazon related questions.
Speaker A:Do you think it is a coincidence that this headline broke less than two days after Amazon's 30 minute delivery announcement?
Speaker A:If yes, why?
Speaker A:And if not, why not?
Speaker B:I mean, no, it can't be a coincidence, it can't be, right?
Speaker B:No, I mean I, I, as I said in the last one, right, like immediately retailers, CEOs and teams have to be looking at this going what, what are we doing?
Speaker A:Right?
Speaker B:And I can't recall in what you just read if that if this depot pilot was already underway or they were announcing getting started.
Speaker B:Like either way, like Walmart's been plotting this, right?
Speaker B:They, they need that.
Speaker B:Like Walmart can't afford to look passive, right?
Speaker B:And so given that this is in the works, given that it made a, a, you know, legitimate like move that they were going to move toward anyway, right?
Speaker B:They have to tell everyone look, we're doing that thing that those guys over doing too, right?
Speaker B:Again, it's all around this psychological battle that I said Amazon was waging, right?
Speaker B:And again not about 30 minutes.
Speaker B:Walmart didn't even mention 30 minute window, right?
Speaker B:But like each of these companies are vying for that pole position of consideration when the need of something fast does arrive, right?
Speaker B:Like the irony here is that Walmart may have the more scalable long term advantage here because Walmart already has physical store proximity.
Speaker B:So it's kind of how we ended the, the last headline.
Speaker B:You know this feels like more filling the gaps because fulfilling at a super centers like is kind of hard today, right?
Speaker B:And putting these near the super centers like is an interesting dichotomy in terms of like, all right, filling this quickly out of these Mega places and not interrupting the customer experience.
Speaker B:Like, all right, we need to learn something more about how that evolves.
Speaker B:So I don't know, I mean, buckle up, right?
Speaker B:Like you got centralized E commerce versus these distributed physical and commerce network.
Speaker B:Like who wins the mind of the consumer when someone needs something in immediacy and you're not really going to go do a thorough search and comparison.
Speaker B:If, if I need something in the next 30 minutes to an hour, I'm going to go to my go to.
Speaker B:Who's the go to?
Speaker B:Like, you know, it's going to be really interesting.
Speaker A:Yeah.
Speaker A:So buckle up, buttercup.
Speaker A:That's.
Speaker A:Let's get it on.
Speaker A:Yeah, I mean There's, I 100% agree with you.
Speaker A:It's definitely not a coincidence.
Speaker A:I mean, and that's why I love doing this show.
Speaker A:But there's two points that stuck out to me as one.
Speaker A:One, the fact that this is being managed by the supercenter I think is really interesting because I go back to like equating it to like when I used to have a trailer in my backyard for extra back to college product.
Speaker A:You know, it's, it's something that the store teams can actually manage probably pretty efficiently.
Speaker A:They just got to do it at a different site.
Speaker A:Depending of course on the fact that maybe the site's not that far away.
Speaker A:But if you think about it that way, it's very manageable.
Speaker A:And then the other point about this, given that Amazon is taking the same approach, I'm starting to wonder if this is the right approach.
Speaker A:And the reason I say that is, you know, you look to Europe, you got the success of companies like Roelik who've already made E groceries work profitably doing ultra fast delivery in this realm.
Speaker A:And it's a much more easy to implement approach than it is say networking your existing store operations, your existing back rooms to be able to handle all of this.
Speaker A:So yes, I mean the whole idea is yes, in theory that is a better way to do it because you get more economies of scale.
Speaker A:But the practice of actually doing it that way is still so unproven.
Speaker A:So that outside of on shelf pickers, this dark store approach could actually be the best, most expedient way to go about solving this problem.
Speaker A:And it seems like the industry as a whole kind of knows that this potentially works now too.
Speaker A:And like I said, it's how Amazon's been doing it.
Speaker A:But Kelly, what do you think?
Speaker C:Yeah, I think it jumps off of the point that Chad was just making on the last headline.
Speaker C:The physical locations of stores the, you know, distance store to consumer can be really limiting.
Speaker C:If you do not have the right store network in place to do these 30 minute deliveries, that's a very short window.
Speaker C:So if you're able to have a dark store hub site that gives you that speed, it definitely seems to me a way to accelerate the delivery timing.
Speaker B:Yeah, right.
Speaker B:Yep.
Speaker A:Yeah.
Speaker A:And then you could batch the loads from that site with the drivers, too, very efficiently and easily, depending on how many are coming in and for what types of items, you know, and I've seen this live in practice from Save A Lot in New York City, and that was essentially what was happening too, so.
