Sam’s Club, a warehouse chain owned by Walmart, has announced a partnership with delivery firm Instacart that will see its customers get same-day service. The warehouse chain joins a growing list of retailers who are joining hands with the delivery startup in the face of an onslaught from online retail behemoth Amazon.
According to Sam’s Club the delivery service will be initially offered in the states of Missouri and Texas specifically Dallas-Fort Worth and Austin in the latter and Missouri in the former. Shoppers will be able to place orders on items that range from small appliances to fresh produce without having to be members of the warehouse chain.
Competition and disruption
The partnership between Sam’s Club and Instacart is coming at a time when competition and disruption has intensified in the grocery sector. The acquisition of Whole Foods Market last year by Amazon served as a wakeup call to the sector and this has pushed grocers to find new ways in which they can delivery pantry items and fresh food profitably.
Sam’s Club’s move to sign up Instacart also marks a shift in strategy by the new chief executive officer of the warehouse chain, John Furner. The Walmart unit has not only been underperforming its parent firm but also competitors such as Costco Wholesale Corp. Recently the warehouse chain shuttered around 10% of its outlets and laid off over 10,000 employees. The membership structure of Sam’s Club was also recently consolidated.
The San Francisco, California-based Instacart currently boasts of partnerships with around 200 retailers and this includes Costco and Target. Using its app shoppers can order groceries from a store of their choice and then have their order delivered within even an hour. The delivery startup makes money from the courier fees as well as via coupon deals and promotions that it has with various manufacturers of consumer goods. Earlier in the month Instacart raised funding totaling $200 million and this boosted its valuation besides offering it new resources with which to compete against the likes of Amazon.
For deliveries in various markets, the parent company of Sam’s Club relies on the services of Deliv or Uber and has so far not directly partnered with Instacart. And while Walmart is experimenting with delivery using its own fleet of trucks in Denver, Colorado, the big box retailer last year acquired a shipping startup based in New York, Parcel. Walmart ranks No. 2 in the U.S. online retail market behind Amazon.