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Walmart (WMT) Tests Delivery With HomeValet's Smart Box Technology

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The demand for grocery delivery has risen over the years and gained further traction amid the pandemic, which has taken online shopping to the next level. Increased stay-at-home trends and elevated at-home consumption have spiked up demand for essentials. Moreover, with people opting for shopping online to maintain social distancing, the need for grocery delivery has certainly increased. Impressively, Walmart Inc. (WMT - Free Report) is one of the retailers, which has been extending all limits to raise its delivery game.

The omnichannel retailer has taken another step in this realm, as it unveiled its latest pilot with HomeValet, which will help Walmart deliver fresh groceries to shoppers’ doors at any point, regardless of whether they are home or not. Notably, participating customers across Bentonville, AR, can get items delivered from their local Walmart stores straight to their door in a temperature-controlled HomeValet-powered smart box, starting this spring. This will enable shoppers to get fresh, safe and contactless deliveries, which has become the need of the hour.

Powered by an Internet of Things (IoT) platform, HomeValet’s smart box possesses three distinct temperature-controlled areas, which can help it store refrigerated, frozen as well as pantry items properly. Further, at the time of delivery, this smart box communicates with the devices of the delivery providers and lends them access to the smart box to conclude the delivery process. Certainly, HomeValet’s smart box is likely to benefit both Walmart and its customers. As customers can get groceries delivered even in their absence, the company will get the opportunity to make deliveries at any time of the day on all days of the week.

Walmart Continues to Ace Delivery Services

The abovementioned pilot is an addition to several other convenient delivery options tested by Walmart in the wake of the burgeoning demand for grocery delivery. The company, which had introduced grocery delivery service in 2018, has undertaken various initiatives to strengthen its foothold in this arena.

In the third quarter of fiscal 2021, Walmart took robust strides to strengthen its delivery arm, as evident from its launch of Walmart+ membership program; drone delivery pilots in the United States with Flytrex, Zipline and DroneUp; and a pilot with Cruise to test grocery delivery through self-driven all-electric cars. Moreover, the company’s curbside pickup option adds to customers’ convenience. Walmart also unveiled an alliance with Door Dash to deliver prescriptions from pharmacies of Sam’s Club, alongside expanding Scan & Go to all fuel stations at U.S. Sam’s Clubs. Prior to this, it unveiled Express Delivery during the first quarter at several stores, which helps it deliver orders to customers in less than two hours.

Such robust endeavors have been keeping the company firmly placed amid the growing competition from Amazon (AMZN - Free Report) . In fact, grocery delivery has been largely aiding Walmart’s e-commerce business. Evidently, U.S. e-commerce sales soared 79% in the third quarter of fiscal 2021 with strength across all channels, including robust traffic at Walmart.com. As of the third quarter, Walmart U.S. had 3,600 pickup locations and 2,900 same-day delivery locations.

That said, we believe that the abovementioned pilot with HomeValet is likely to step up Walmart’s grocery delivery game. This Zacks Rank #2 (Buy) stock has rallied 28.3% in a year’s time, outpacing the industry’s growth of 24.8%.

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