Three reasons why Walmart is acquiring its Spark driver platform partner...
30 August 2022Walmart is acquiring Delivery Drivers Inc., a key partner in its Spark driver delivery...
Walmart is acquiring Delivery Drivers Inc., a key partner in its Spark driver delivery platform.
Simplifying the driver experience
Delivery Drivers Inc. is a specialist in last-mile contractor management, helping individual operators complete deliveries. This is an integral element of Walmart’s Spark delivery platform which powers its own deliveries and those of other businesses through its GoLocal service. While Walmart is acquiring the business to create a better and simplified experience for drivers on the platform, it will also provide the retailer with three competitive advantages.
1. Lower costs
Having launched the Spark Driver platform in 2018, it reaches 84% of US households. It is the largest delivery provider for Walmart, fulfilling almost two-thirds of its delivery orders. Through bringing this key component in-house, it should enable the retailer to reduce costs while planning for the expansion of the GoLocal service. Many consumers are stating a preference for lower cost deliveries over faster deliveries.
2. Create a springboard for innovation
The deal should also enable Walmart to be more innovative with its on-demand and scheduled delivery programmes. The acquisition of Shipt by Target in 2017 provided it with the platform to expand its same-day delivery capabilities and offer a broader range of products through the service. This is even more important as quick commerce providers continue to emerge and an increasing number of competitors target the sub-30-minute delivery space.
3. Enable service as a differentiator
In the US, Walmart works with a range of partners for on-demand delivery, including Instacart, although the retailer is ending its four-year partnership with DoorDash. This move will see more of the retailer’s deliveries undertaken by the Spark service. This will enable the retailer to offer a more consistent customer experience, with final delivery being an important touchpoint within the brand experience. Apart from Target and Amazon, all other major US retailers rely on third-party delivery partners; the move to bring this in-house could enable to the retailer to create a point of difference through delivering an outstanding final touchpoint with customers.
Check out our series on next generation value creation in supply chains for more on how retailers are increasingly looking to their supply chains to drive innovation and to create new products and services.
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