It is hardly surprising that Walmart is no longer delivering via DoorDash, considering that the two firms are in competition when it comes to providing delivery fulfillment for grocers.
The two companies recently ended their relationship after four years of the retailer offering on-demand delivery on the aggregator’s marketplace, and Seeking Alpha reported that the partnership is expected to come to a close next month.
“We’d like to thank Walmart for their partnership and are looking forward to continuing to build and provide support for merchants in the years ahead,” a Doordash spokesperson told PYMNTS on Friday (Aug. 19).
Related news: DoorDash, Walmart Sever Delivery Deal
Unnamed sources explained that the decision came from DoorDash. Yet, it could have something to do with Walmart’s moves in recent years to put itself in competition with leading delivery providers. One year ago, the retailer announced the launch of its GoLocal white-label delivery offering. The service may focus more on delivery in advance than on on-demand delivery, with the shortest time frame on offer being two hours. Still, the retailer is, to an extent, competing with DoorDash for the aggregator’s non-restaurant customers.
“In an era where customers have come to expect speed and reliability, it’s more important than ever for businesses to work with a service provider that understands a merchant’s needs,” John Furner, president and CEO of Walmart U.S., said in a statement at the time. “Walmart has spent years building and scaling commerce capabilities that support our network of more than 4,700 stores and we look forward to helping other businesses have access to the same reliable, quality and low-cost services.”
The GoLocal web portal notes that the retailer powers delivery of everything “from groceries to general merch,” while DoorDash, meanwhile, has spent the last couple of years focusing on expanding its non-restaurant offerings, adding new merchants in those categories and driving consumer adoption of these options.
“We are seeing higher retention and order frequency activity from these customers who are engaging in multiple categories, DoorDash Co-founder and CEO Tony Xu told analysts on a call earlier this month. “I think this makes quite a lot of sense, as we’re solving now different jobs and tasks for the customer. But that said, look, we still have to earn every inch. We have a long ways to go in terms of the product experience in each one of these categories before we’d be satisfied with that behavior.”
By offering a delivery solution for these same merchants that DoorDash is targeting, not quite on demand but still within a short time period, Walmart poses something of a threat. The retailer, however, continues to work with on-demand aggregators Uber Eats and Instacart.
The news comes as consumers increasingly make online grocery delivery orders part of their typical routines. The July edition of PYMNTS’ ConnectedEconomy™ series, “The ConnectedEconomy™ Monthly Report: The Rise of the Smart Home,” which drew from a May survey of more than 2,600 United States consumers, found that 40% had ordered groceries online for home delivery in the prior month.
Get the study: The Rise of the Smart Home