Walmart has teamed up with Instacart to provide same day grocery delivery in four markets across California and Oklahoma, reports CNBC.
Instacart users in Los Angeles, San Francisco, San Diego and Tulsa will be able to order groceries, alcohol and more from Walmart stores for delivery in as little time as one hour.
The move is of note because this is the first time that Walmart has enlisted the help of Instacart for its main stores in the U.S. (Instacart delivers for Walmart Canada as well as Walmart-owned Sam’s Club). As Grocery Dive points out, the agreement comes just a week after Walmart reportedly delayed the launch of its Amazon Prime-like service, Walmart+, which will include same-day grocery delivery.
The timing for such a partnership is certainly right. The COVID-19 pandemic has spurred record amounts of online grocery shopping, which entails either curbside pickup or delivery. As it was deluged with demand, Instacart raised another $225 million in June and ratcheted its number of gig Shoppers (who do the picking and delivery) to 750,000 to keep up.
What’s somewhat curious about this deal is why Walmart is choosing to do it. Obviously the big reason to help fend off Amazon, which saw its grocery sales triple year-over-year, from gobbling up marketshare as it starts rolling out its own real-world grocery stores. Plus every player in the grocery retail space has bulked up its delivery options. But unlike Instacart’s other grocery store partners, Walmart is a logistics machine. I’m not sure why it would want to hand over the customer relationship to a third-party.
Perhaps this is indeed more of a stopgap to help retain and gain customers while Walmart ramps up its own delivery mechanisms. Or perhaps Walmart is finding more customers use its curbside pickup offering (a service it was pushing hard at the beginning of the year).
Regardless, the pandemic has forced all kinds of acceleration and adaptation in the grocery space, and this deal from Walmart and Instacart is just one more story that will keep going throughout the year.