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Walmart already doubled down on its grocery pickup service. Now it’s doing the same for grocery delivery.
The big question: Can it succeed at both?
The giant brick-and-mortar retailer just announced that it is expanding its online grocery delivery service from six U.S. metro areas today to more than 100 in total by the end of the year, which should make it available to more than 40 percent of the U.S. population.
The announcement comes amid an onslaught of competition in the grocery delivery space, highlighted by Amazon’s rollout of Prime Now delivery, Target’s $550 million acquisition of delivery startup Shipt and Instacart’s streak of signing on big grocery partners.
But it is a bit surprising considering that Walmart has already invested a lot of time and money into its grocery pickup business, which is available at 1,200 stores and allows customers to pick up their online orders without exiting their cars. The company will add the service at another 1,000 stores by the end of this year.
The grocery pickup service doesn’t cost anything extra for shoppers. And that value proposition makes sense because the average Walmart customer has less disposable income than those of Amazon or Target.
But the grocery delivery service? It comes with a $9.95 delivery fee. So I asked a Walmart spokesperson who the intended customer is: Walmart’s existing customer or a different customer base the company aspires to reach?
It’s a bit of both, she said, but the rest of her answer made it sound like the latter.
“Online Grocery Deliver will make Walmart more accessible to some customers where it wasn’t before (customers who didn’t want to drive out of the city center to a suburban Walmart, customers who physically can’t get to a Walmart, or customers who only have their groceries delivered these days!).”
Today, Walmart uses partner companies Uber and Deliv to handle deliveries in its six current markets. The company says it will add more partners as it expands, which raises the possibility of a tie-up with Instacart, which recently announced a delivery relationship with Walmart subsidiary Sam’s Club.
On one hand, the idea of Instacart partnering with the enemy of all of its regional grocery chains sounds farfetched. On the other hand, it’s 2018 and Amazon owns Whole Foods — which means anything is possible in the grocery space.
This article originally appeared on Recode.net.
