Walmart acquires delivery startup Parcel to help it own New York City with same-day delivery.
Walmart announced on Tuesday that it had acquired Parcel, a New York-based logistics firm. Parcel has warehouses in Brooklyn and a network of couriers that partner with brands like Bonobos to offer same-day delivery in certain areas.
Walmart’s acquisition of Parcel will supercharge the retailer’s efforts to bring same-day delivery to New York.
Walmart subsidiary Jet.com already offers same-day delivery on some orders in certain areas for no additional cost. Items eligible for the service include frozen and fresh grocery items, as well as general consumer items like electronics.
Parcel allows customers to schedule deliveries for when they will be home and receive text messages with updates on when their order will arrive.
Walmart has its eyes set on the Big Apple.
The acquisition of Parcel signals a desire to boost that practice so that Walmart can better compete with other same-day delivery services, like Amazon’s Prime Now. Parcel has New York-centric consumer data that Walmart can make use of, including a database with information on the buildings the company has delivered to, according to Recode.
The so-called “last mile problem” — how to deliver to customers who have neither front porches nor doormen — is one of the biggest problems online stores face in getting items into customers hands. Parcel’s delivery vans have “No doorman? No problem” emblazoned on the side in big letters.
Same-day delivery is increasingly seen as the next iteration of e-commerce, in the same way that two-day shipping has become the standard. Amazon has built fulfillment centers in major city centers to fulfill Prime Now orders, and Best Buy overhauled and expanded its same-day deliveryservice earlier this year.
Jet’s focus under the Walmart umbrella is to chase the millennial urban consumer that hasn’t historically been reached by the parent brand. Earlier this year, Jet announced a partnership with Latch, another New York-based startup that offers keyless entry for delivery personnel to leave packages inside a doorman-less apartment building.
In a post on Walmart’s press blog, Nate Faust, a senior vice president at Walmart, called New York City the “top market” for both Jet.com and Walmart.com.
Parcel and Walmart did not disclose the acquisition price, but Recode reported that an anonymous source says it was less than $10 million. Parcel had previously raised $2 million in funding and had six full-time employees, who will move over to Walmart brands.
With reports from Business Insider