Wal-Mart employees can now deliver your online orders on their way home from work

Key Points
  • Wal-Mart is testing an app that matches online order delivery addresses with its employees' driving routes home so the workers can deliver packages ordered online as they drive home.
  • Participation in the program by the store staff is voluntary.
  • The program is currently being tested in two New Jersey locations and one in Arkansas.
Wal-Mart testing employee delivery program in 2 states
Wal-Mart testing employee delivery program in 2 states and shoppers in three U.S. cities now have a new delivery person, and it's not employees of one of the major shipping companies like FedEx or UPS or a delivery start-up like Instacart or Deliv.

It's a Wal-Mart store employee.

"Unlike crowdsourced delivery, where the driver has to travel (often out of the way) to pick up the package, then drive the full distance to deliver it, our associates are starting at the same place as the packages," said Marc Lore, president and CEO of Walmart eCommerce U.S., in a blog post for the retailer.

It all works through a proprietary app the retailer built for this test.

The app matches online order delivery addresses with employees' driving routes home from work, built to minimize any more driving than what the employee would do anyway to get home. Delivering is completely voluntary, and the employees can choose when they want to deliver, how many packages they can take and what size.

"Once they're done working at the store for the day, they pick up the packages from the backroom, load them into their vehicle, enter the delivery addresses into the GPS on their phone and head towards home," Lore said.

Wal-Mart compensates the employees for it but declined to elaborate how it works.

The discount retailer said the test has only been in progress for a month but so far "hundreds" of deliveries have been completed in two locations in New Jersey and one in Arkansas.

So far, "the response from associates and customers has been great," Lore said.

Its locations and labor — some 4,700 U.S. stores with 1.3 million employees — are quite an asset that Lore has been working on further integrating with its digital operations. The retailer says 90 percent of the country's population live within 10 miles of a Walmart store.

While the retailer does not provide a delivery cost breakdown, it's the last leg — commonly referred to as the "last mile" — that is the most expensive when it comes to fulfilling and shipping online orders.

Consultant group McKinsey & Company estimates "the last mile" can sometimes be more than half of an item's total delivery cost.

Last month, Wal-Mart Stores said it would offer shoppers a discount for 10,000 online-only orders that are picked up by shoppers in store rather than delivered to their homes. The discount, Marc Lore said, is "meant to be equivalent to what the last-mile delivery costs are," which in most cases averages to about a 4 percent discount per item.

The store pickup option saves Wal-Mart delivery costs, which it passes on to shoppers in the form of discounts, but the new employees-as-delivery-service test does not offer shoppers a discount. Wal-Mart said the benefit is that most orders are delivered the next day.

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