Walmart’s “Last Mile” Delivery Plan Stumbles

Walmart Inc. (NYSE: WMT) unveiled its “last mile” initiative last year, a plan to combat Amazon.com Inc. and other online delivery services from stealing its customers. The strategy requires Walmart’s own store employees to bring online orders directly to customers’ homes after completing their usual shifts, while earning extra pay on top of their hourly wage.

“Just imagine associates all over the world delivering orders to customers on their way home,” Marc Lore, head of Walmart’s e-commerce operations, said at its annual meeting in June 2017. “That can be a real game-changer.”

But months later, Walmart quietly retreated from its original vision for the pilot program – launched in New Jersey and Arkansas – and ended it altogether in January, according to company documents obtained by Reuters and interviews with more than two dozen Walmart employees.

Fourteen of the sixteen Walmart employees said that they were put off by the program’s poor compensation. And all of them expressed concern over who would be responsible if they got into an accident or if merchandise was lost.

For example, the East Brunswick Walmart paid store associates $2 per package, with participants making three to five total drop-offs during a typical trip within a ten mile radius. It also reimbursed them 54 cents for fuel per mile, over the federal fuel reimbursement rate of 53.5 cents in 2017, and offered them an extra hour of overtime pay.

But every employee who signed up said they typically lost at least 30 minutes of time, waiting at the store after their shifts ended to collect the items and were never compensated for it.

Walmart is now testing the service with only four employees who deliver goods from a single store in Woodstock, Georgia, limiting the deliveries to groceries and related items.

Walmart spokeswoman Molly Blakeman confirmed that the retailer ended its first experiment early this year, without elaborating. Walmart is testing a variety of ways to deliver merchandise, she said, and is “encouraged by what we’re seeing” in the Georgia store.

The initiative, internally named “Associate Delivery 2.0” will waive the fee for the first delivery order if it is for $50 or more, according to a Walmart promotional pamphlet at the store. For subsequent orders, the retailer’s mobile app offered delivery on a minimum $30 order for a fee of $7.99 to $9.95.

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