January 16, 2023. New York, New York. Walmart GoLocal both at the NRF Big Show
The NRF Big Show features an expo hall full of tech vendors, but one booth stood out from the rest, not because of holographic customer service reps or Decentraland
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The booth featured Walmart GoLocal, which the retailer launched in August 2021. Most of the coverage of this launch came from supply chain trade publications that billed it as “delivery-as-a-service”. That service has grown substantially over the last 18 months, to over 5,000 delivery locations and well over one million orders fulfilled.
The Spark Driver app, Walmart’s platform for gig worker-style local deliveries, makes GoLocal possible. Spark has most frequently been compared to DoorDash, Instacart, and Shipt. But it’s really more like Amazon Flex. Third party apps like DoorDash work around retailers, often facilitating delivery without the direct participation of the retailer. Both Spark and Flex started as delivery services for their name-brand founders, Walmart and Amazon
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The GoLocal model extends that difference to other retailers by offering a white-label service. As a consumer, you order from your favorite brand and it appears like your favorite brand is delivering. With DoorDash, you’re ordering from DoorDash, and DoorDash is delivering – and plenty of companies (especially small businesses) have not been happy about exactly how they’ve been disintermediated out of owning the customer relationship in those experiences.
Walmart Web Services?
Amazon has redefined the retail model in more ways than one. One of the most powerful ways has been through commercializing the technology it uses to run its own retail arm, billed as Amazon Web Services, or AWS. This has been so successful that there have been cries to break up the two halves, among accusations that the tech side actually subsidizes the retail side – that Amazon can basically run its retail arm as a loss leader to drive adoption of the tech it sells.
Walmart has responded to almost every competitive move that Amazon has made. This article from Protocol lays out the long sordid history of Walmart’s multiple attempts to inject itself with hard-core tech DNA. GoLocal is definitely the latest on this road. And as far as leveraging your strengths, GoLocal has some very positive points. For example, it centers around Walmart stores, which already give it an advantage in reach, especially in those hard-to-serve rural and suburban areas. It has the order volume of Walmart itself to start from, and a built-in base of prospective clients through Walmart’s marketplace members.
However, GoLocal is moving beyond merely the leverage of Walmart’s logistics strengths and relationships by also announcing this month that it has partnered with Salesforce to offer GoLocal in the Salesforce AppExchange, making the service available not just to Walmart marketplace partners, but to any retailer leveraging Salesforce Commerce Cloud. And they made this announcement while basically staring across the expo hall aisle at AWS’s booth, just across the way.
Copying The Competition
No matter how many acquisitions or employees are attached to Walmart Global Tech, it’s just very challenging to think of the company as a “tech leader”. No one is talking about Walmart Cloud, let alone in the same breath as AWS, Azure, or Google. No one is talking about Walmart’s latest streaming content or Emmy or Oscar nominations (or lack thereof). No one is talking about Walmart’s moonshot health care bid.
GoLocal isn’t a huge departure from the company’s core logistics and operations competencies. But selling it – offering a packaged solution to retailer clients who will now expect customer success managers, service levels and a service desk to call, as well as a roadmap – that’s not retail. Amazon has been confounding in that respect, because even though they went about it backwards, you could argue that today they’re really a tech company that uses its own products rather than the other way around (oh, and Whole Foods). The innovation and research arm resides on the retail side, which is interesting because it keeps innovators closer to consumers and what they want. But AWS is a B2B commercial enterprise. With a sales force and service levels and a roadmap.
Is this what retail needs to be? Is it what retail needs to become in order not to be made irrelevant by what has effectively become a loss-leading R&D site? Does that mean that we need Home Depot Tech Services and Kroger Global Tech, just to keep these retailers’ stores open?
Retail Does Not Need To Commercialize Its Tech Services To Win
Since the rise of eCommerce the “selling process” in retail has become more and more commoditized. It’s very difficult to differentiate based on “all the great brands we have under one roof” when any of those brands is just a click away online. Retailers do need to become something more than just retail. Between the Great Recession and a global pandemic, we’ve basically emptied the market of big box retailers to the point where even some of the last ones left standing (like Bed Bath and Beyond) can’t even survive when all of their big box competitors have been wiped out.
But retailers don’t all need to scramble to become tech providers in order to survive. Perhaps Walmart can build up enough genuine tech partners like Salesforce to coalition its way to compete effectively against Amazon. But they could also look to their customers and what their customers want and need.
Walmart helps customers save money. They could bring a lot more meaning and loyalty to their customers’ lives if they embraced what they’re already known for – and good at. But it would require genuinely caring about the welfare of its customers and employees, and being more proactive around services that would help their customers – like health care, and finance education and accompanying services. Build genuine connections and lifetime loyalty by helping consumers – the people Walmart is already good at serving.
Walmart has spent billions of dollars trying to be a tech company. Where would it be today if it had invested that money in something actually differentiating? Not running a booth at NRF, that’s for sure.
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