Imagine your urgently needed shampoo, your children's snacks, or that kitchen appliance you've been eyeing—delivered not by a stranger, but by the same Walmart associate who helped you find them on the shelf yesterday. This scenario might soon become reality as the retail giant seriously considers implementing an "employee delivery" model to transform its last-mile network.
Doug McMillon's Strategy: Third-Party Fulfillment and Employee Participation
Walmart President and CEO Doug McMillon recently signaled at the Goldman Sachs Global Retail Conference that the company plans to expand third-party fulfillment capabilities while integrating employees into last-mile delivery. Though current employee delivery volumes remain minimal compared to independent contractors (particularly drivers from the Spark Driver platform), McMillon's statements suggest that as Walmart refines its last-mile network, leveraging employee vehicles and labor for deliveries is imminent.
"We've proven we can provide services to third parties, whether that's last mile or fulfillment services, and that business will continue to scale in the U.S. and other markets where we operate," McMillon stated, expressing confidence in Walmart's third-party fulfillment capabilities while hinting at the strategic importance of employee deliveries.
A Comeback Strategy in the E-Commerce Boom
This isn't Walmart's first attempt at employee deliveries. In 2017, the company tested having store associates deliver online orders in select markets, allowing employees to volunteer for deliveries after shifts for extra pay. While innovative at the time, the pilot quietly ended in 2018 due to limited employee participation—many were reluctant to use personal vehicles and insurance for work purposes.
The pandemic dramatically accelerated e-commerce growth, with Walmart's store-fulfilled delivery sales nearly tripling in two years. To meet surging demand, Walmart has relied heavily on thousands of independent contractors through Spark Driver. However, peak capacity constraints and high delivery costs have made reviving employee deliveries an attractive solution.
Strategic Upgrade: Building a Comprehensive Delivery Network
With approximately 1.6 million U.S. employees as of January 31, even modest participation could significantly boost delivery capacity. Walmart's motivations for relaunching the program include:
- Cost Reduction: Leveraging existing employees for deliveries avoids additional vehicle and labor expenses while improving efficiency through associates' local knowledge.
- Enhanced Customer Experience: Familiar faces delivering orders can provide personalized service, answer product questions, and offer flexible delivery options.
- Workforce Retention: Additional earning opportunities may improve employee satisfaction and reduce turnover in a tight labor market.
- Network Resilience: Combining employee, contractor, and proprietary fleet resources creates a more robust last-mile system adaptable to various scenarios.
Challenges and Opportunities
Success requires overcoming several hurdles:
- Employee Incentives: Competitive compensation, flexible scheduling, and recognition programs will be crucial for participation.
- Safety Protections: Commercial insurance, safety training, and proper equipment must address liability concerns.
- Quality Control: Advanced routing systems and real-time tracking will be needed to maintain service standards.
Walmart employees offer unique advantages over third-party drivers—product knowledge, reliability, and the ability to build customer relationships. Combined with Walmart's vast store network and supply chain, these strengths could make employee deliveries a competitive differentiator.
The Future of Last-Mile Competition
As e-commerce grows, last-mile delivery has become a critical battleground. While Amazon dominates with its logistics network and Target expands with store pickup and Shipt partnerships, Walmart's employee delivery initiative represents an innovative approach to combining retail's human touch with operational efficiency.
The model's potential evolution includes AI-driven route optimization, autonomous delivery vehicles, and sustainable transportation options. However, Walmart must carefully balance technological advancement with workforce considerations to ensure this gamble pays off.
Whether employee delivery becomes Walmart's last-mile trump card remains to be seen, but it undoubtedly signals the retail industry's ongoing transformation—where innovation in fulfillment meets the enduring value of human connection.