Walmart Acquires Parcel: Another Potential Blow to Amazon

Georgia Reed
October 5, 2017

Walmart gained serious ground against Amazon on Tuesday in the battle for supremacy in the online delivery game. The company announced yesterday (Oct. 3) that it has acquired Parcel, a technology based, same-day and last-mile delivery company specializing in perishable and non-perishable delivery to customers in New York City, for an undisclosed sum which is "smaller than previous acquisitions" the company made this year (e.g., Bonobos' $ 310mn acquisition).

Founded in 2013, Parcel is a so-called "last-mile" delivery platform that operates around the clock and delivers in as quickly as two-hour windows.

The financial terms of the deal were not disclosed. Jet has been testing free same-day delivery of certain orders to customers in New York City.

Faust added that New York City is a top market for Wal-Mart and Jet, both because of its population density and because of its proximity to some of Wal-Mart's distribution centers.

The idea is for Parcel to help Walmart with the most expensive final stretch of its same-day and scheduled shipping throughout the city.

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Nate Faust, senior vice president of Walmart U.S. e-commerce supply chain, said, "Parcel has developed unique expertise delivering to customers in a distinctly challenging and essential market".

As quick and fast delivery, low prices, and vast assortments take center stage to bring in customers, Walmart's acquisition of Parcel looks to be another strategic addition aimed at strengthening its digital capabilities to compete with Amazon.com (AMZN), Target (TGT), and Costco Wholesale (COST).

Walmart is now locked in a fierce battle with Amazon.com, whose Prime members can get free two-hour delivery on some items and same-day delivery for free on some others. The company has partnerships with several meal kit, grocery and e-commerce companies.

"I see even more upside for our own same-day deliveries", Nate Faust, Walmart's SVP of USA commerce supply chain, said in a blog post. "No problem" emblazoned on the side in big letters. Faust said that the city is the "perfect place for high-impact innovation".

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