Here's Where Amazon and Walmart Differ on In-Home Delivery

Walmart tries to allay customer worries with tweaks that separate it from Amazon Key. Read More...

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Although surveys indicate consumers remain leery about letting strangers into their homes, Walmart (NYSE: WMT) announced it was expanding its in-fridge delivery service into three cities that it began testing in 2017 in Silicon Valley.” data-reactid=”11″>Although surveys indicate consumers remain leery about letting strangers into their homes, Walmart (NYSE: WMT) announced it was expanding its in-fridge delivery service into three cities that it began testing in 2017 in Silicon Valley.

Believing convenience will ultimately outweigh privacy concerns, Walmart will offer some 1 million customers in Kansas City, Mo., Pittsburgh, and Vero Beach, Fla. the opportunity to order groceries online and have them delivered and put away in their homes by a Walmart employee starting this fall.

A Walmart employee delivers a box into someone's home. — A Walmart employee delivers a box into someone’s home.

Image source: Walmart.

There are a few differences between the pilot program and the new, expanded service. The pilot program used a homeowner’s existing August Home security camera system to monitor the movements of third-party drivers from Deliv as they put the groceries away. The test ended last year, and in February, Walmart severed its e-commerce delivery relationship with Deliv.

The new service now uses Walmart’s own employees to make the delivery, and they will wear a camera so their actions can be seen by the customer via their smartphone. Walmart said in a statement, “Now we can serve customers not just in the last mile, but in the last 15 feet.”

Convenience is the key

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The grocery delivery service is called InHome Delivery and is similar to Amazon.com‘s (NASDAQ: AMZN) Amazon Key program, which also lets it deliver packages into a customer’s home or car.” data-reactid=”28″>The grocery delivery service is called InHome Delivery and is similar to Amazon.com‘s (NASDAQ: AMZN) Amazon Key program, which also lets it deliver packages into a customer’s home or car.

A good argument can be made that there is a certain level of demand for the service based on a need to prevent theft. Packages left on doorsteps are notoriously vulnerable to being stolen by so-called “porch pirates,” who even follow delivery vehicles around waiting for packages to be left unattended while the homeowner is away at work.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The benefit of the Walmart service is that unlike Amazon Key, which is primarily a service for packaged items ordered online, InHome Delivery is targeting consumers who are ordering perishable items, meaning there is a certain urgency in getting them into the home and put away quickly to minimize food safety concerns.” data-reactid=”30″>The benefit of the Walmart service is that unlike Amazon Key, which is primarily a service for packaged items ordered online, InHome Delivery is targeting consumers who are ordering perishable items, meaning there is a certain urgency in getting them into the home and put away quickly to minimize food safety concerns.

Minimizing consumers’ concerns

Walmart is also putting the weight of its brand behind the delivery service by having its own employees make the deliveries rather than some gig worker, as is often the case with Amazon Key. That ought to lessen worries about strangers roaming around inside their house because there is a more direct relationship (and established reputation) with the company.

And for those still concerned about giving a stranger access to their home’s interior, customers can arrange to have the food delivered to a refrigerator located in a garage, an option also available with Amazon Key.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="As an added bonus, InHome Delivery customers can also arrange for returns of items purchased on Walmart.com. By simply leaving the package on the counter for the employee to pick up, it enables a process even more convenient than Amazon’s partnership with department-store operator Kohl’s.” data-reactid=”34″>As an added bonus, InHome Delivery customers can also arrange for returns of items purchased on Walmart.com. By simply leaving the package on the counter for the employee to pick up, it enables a process even more convenient than Amazon’s partnership with department-store operator Kohl’s.

Cost could be a hurdle

Cost for in-home delivery hasn’t been revealed yet, but customers currently pay $9.95 per delivery. And for what it’s worth, Walmart just announced it was testing another new service called Delivery Unlimited, which for $98 a year gives customers unlimited grocery deliveries for orders over $30, though whether in-fridge delivery will eventually be a part of it is uncertain as Walmart is testing it in four different cities.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Like Amazon Key, InHome Delivery also requires the homeowner to have a smart-entry lock on their home that the delivery person can access, but Amazon requires the customer to have a cloud-based camera setup, too. Key is also only available to Prime members, which costs $119 a year, though you do get a host of other benefits with the program.” data-reactid=”41″>Like Amazon Key, InHome Delivery also requires the homeowner to have a smart-entry lock on their home that the delivery person can access, but Amazon requires the customer to have a cloud-based camera setup, too. Key is also only available to Prime members, which costs $119 a year, though you do get a host of other benefits with the program.

Not a very big market opportunity

There seem to be some issues that still need to be addressed, such as homes with pets or security systems, and the idea that it is a relatively expensive, labor-intensive service for Walmart to implement to attract a very narrow slice of the market. Not only does it require a customer willing to give a stranger access to their home, but also one whose home has been enhanced by technology and who is willing to pay up for the service.

Still, by offering “food aisle to fridge” service, Walmart is ensuring its customers are able to shop where they want, how they want, and when they want, and telling Amazon.com at the same time that it is willing to match it step for step and not ceding any ground to it.

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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon. The Motley Fool has a disclosure policy.” data-reactid=”53″>John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon. The Motley Fool has a disclosure policy.