Retail giant Walmart wants to stop rival Amazon from becoming a big player in one competitive space.
Amazon (AMZN) – Get Amazon.com, Inc. Report stands as the only real rival for low-price retail for Walmart (WMT) – Get Walmart Inc. Report. Sure, Target (TGT) – Get Target Corporation Report and Costco (COST) – Get Costco Wholesale Corporation Report have their fans, but on sheer volume, Walmart and Amazon stand alone and both want to dominate the grocery space.
Walmart has invested heavily in curbside pickup and local delivery. Amazon owns Whole Foods –not a discount player by any means — but it also has its own grocery delivery business and a slowly growing line of non-Whole Foods Amazon Fresh brick-and-mortar locations. That’s, in theory, a major challenge to Walmart, which uses low-cost groceries as a way to drive customers to its stores.
During the pandemic, Walmart invested millions in improving its curbside pickup and delivery options. Now, it wants to make those services available to third-party grocery stores. The retail giant hasn’t said that it’s doing that to give smaller chains a way to compete with Amazon, but that’s clearly part of its plan.
Image source: Walmart
Walmart Goes White Label
Walmart GoLocal, the retail giant’s last-mile delivery business, has partnered with Cognetry Labs “to provide an integrated white-label, turnkey eCommerce plus delivery solution to mid-sized and independent grocery retailers.”
The new offering will leverage Walmart’s delivery capabilities, enabling Cognetry Labs retail clients to “grow their own brand and build customer relationships while benefitting from the robust capacity and experience of the world’s largest retailer.”
White label means that people getting deliveries will think it’s coming from their local grocery chain and not Walmart. Essentially, this puts Amazon-like delivery capabilities in the hands of local grocery stores, giving them at least a chance to compete.
“As an independent grocer, the need to offer our customers convenient access to online shopping and local delivery has never been more prevalent,” said a Cognetry client, Ediberto Hernandez, the owner of Ideal Food Basket in Dania Beach, Fla.
“By enabling delivery with Walmart GoLocal through our Cognetry Labs platform, we’ve been able to ramp grocery delivery in a matter of weeks, providing our customers with reliable delivery at an affordable price.”
Walmart Wants to Block Amazon
Walmart, as you would expect, wants people to believe it’s concerned about the same midsized and independent businesses it has competed with and driven out of business.
“Walmart GoLocal and Cognetry Labs have a shared priority of supporting midsized and independent businesses and providing efficient, reliable delivery to families in communities across the country,” Walmart GoLocal General Manager Harsit Patel said in a news release.
“This is one way we deliver on Walmart GoLocal’s brand promise to bring affordable access to products and services to customers while also empowering businesses to grow using our capabilities and coverage. The fully integrated solution with Cognetry Labs plus Walmart GoLocal drives value to our customers and addresses real needs of midmarket retailers.”
The new offering does do that and licensing tech to rivals isn’t unprecedented — Starbucks (SBUX) – Get Starbucks Corporation Report has a division designed to do the same thing with its mobile ordering technology. In this case, however, Walmart gains both from licensing its added capacity and creating a local option to Amazon.
Basically, customers of this new venture can play the “go local” card while actually paying money to Walmart.
“The partnership with Walmart GoLocal, and the integration of our two platforms, levels the playing field for midsized and regional retail chains to compete for customers buying online,” Cognetry’s vice president of sales and customer success, Ryan Maurer, said.
“Cognetry Labs lets retailers know that with the right technology partner, you can get online quickly and grow profitably. Cognetry Labs plus Walmart GoLocal last-mile delivery enables retailers nationwide a turnkey competitive response in owning their eCommerce and delivery solution.”
Walmart is basically empowering smaller players to compete with Amazon. That’s not how it’s being sold, but that’s at least a byproduct of what Walmart has done.
