Retail giant Walmart will open up its last mile delivery service GoLocal to other retailers who want to use its logistical power. It may seem like a simple commercial proposition, but it entails much more than merely selling a service. Walmart has taken a good look at its major challenger Amazon and is eager to reap the benefits of the wealth of customer data it will also be able to collect.
Groceries delivered within 2 hours
GoLocal is a new service that builds on the supermarket giant’s own delivery service, Express Delivery, which Walmart already offers to its customers. It delivers groceries to customers within a maximum of two hours. Express Delivery currently delivers around 160,000 products from 3,000 retail outlets. Walmart says it covers about 70 % of the American market this way.
The couriers of Express Delivery are drawn from another Walmart initiative, Spark Driver. These are the same couriers who will be the driving force behind GoLocal. Unlike Express Delivery, however, GoLocal will not rely on external couriers from companies such as DoorDash.
A wealth of customer data from competitors
So far, this is all a purely American story. More interesting, however, is what Walmart wants to do behind the scenes with this service. A retailer who wants to use GoLocal, will have to perform several technical integrations to link their own e-commerce platform to GoLocal.
That is perhaps the main clue of this story: such an integration may be indispensable to run the service, but Walmart is also harvesting all customer and order data from the external retailer. That data is a potential treasure trove of information that Walmart can use to optimise its own competitive offering. The story is very reminiscent of the relationship between Amazon and the external retailers who use the e-commerce giant’s sales platform.
A rap on the knuckles by Vestager
Last year, the European Commissioner for Competition Margrethe Vestager criticised Amazon for precisely this practice. In November, Jeff Bezos’ company (at the time) was officially charged for mining data on the products sold and the offers from external providers on its platform and using it for its own offerings and pricing.
As a result, the European Commission launched an investigation in July 2019 and subsequently ruled that Amazon “circumvented the risks of competing with other retailers”. In addition, a new investigation into Amazon’s use/abuse of its own logistics services was launched immediately: Amazon would favour customers of those services over others in its algorithms. Now, Walmart is also looking with delight to those data-related opportunities in an environment far removed from the European Union’s interference.
