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Walmart (WMT) Boosts Revenue Streams With Walmart GoLocal

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Walmart Inc. (WMT - Free Report) , which is known for pushing the edge out of the envelope with regard to bolstering delivery services, has announced a new business line. The omnichannel retailer unveiled the creation of Walmart GoLocal — which will help deliver products to businesses of all sizes. With customers’ increased demand for speedy and reliable delivery services, there comes a need for a service provider that can cater well to merchants’ requirements.

That said, Walmart GoLocal will help businesses grow, by leveraging Walmart’s robust delivery capacity and worldwide coverage at reasonable pricing. This white-label delivery service includes a wide array of assortments, along with the flexibility to serve different timelines. Walmart GoLocal is based on the company’s ability to undertake deliveries at different scales efficiently. Walmart has launched and scaled its delivery services significantly in only three years, and has reached about 70% of the American population.

The launch of Walmart GoLocal follows the company’s plans to start offering technologies and capacities to enable other businesses explore their own digital transformation. Certainly, this new service forms a vital part of Walmart’s overall growth strategy — which involves diversifying revenue streams as well as profit pools through efforts, such as Walmart Connect and Walmart Fulfillment Services. These efforts, together with the company’s other e-commerce initiatives, help it stay firm amid the rising competition from Amazon (AMZN - Free Report) .

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Walmart’s Delivery Game On

Walmart’s delivery service has become all the more vital amid the coronavirus-led social distancing. Walmart has taken robust strides to strengthen its delivery arm, as evident from its investment in DroneUp; pilot with HomeValet, introduction Carrier Pickup by FedEx, launch of Walmart+ membership program; drone delivery pilots in the United States with Flytrex and Zipline; and a pilot with Cruise to test grocery delivery through self-driven all-electric cars. The company had also unveiled an alliance with DoorDash (DASH - Free Report) in the third quarter of fiscal 2021 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, Walmart unveiled Express Delivery during the first quarter of fiscal 2021 at several stores, which helps it deliver orders to customers in less than two hours. In earlier developments, Walmart joined hands with Point Pickup, Roadie and Postmates, alongside acquiring Parcel to enhance its delivery service. The company’s store and curbside pick-up options add to customers’ convenience. As of the second quarter of fiscal 2022, Walmart U.S. had 3,900 pick-up locations and 3,250 same-day delivery stores.

Solid delivery services remained a driver for Walmart’s e-commerce sales in the second quarter of fiscal 2022. The company’s e-commerce business has also been benefiting from its other initiatives like buyouts, alliances, and improved payment systems. On May 13, Walmart unveiled plans to acquire Zeekit, which is focused on uniting fashion and technology via its virtual fitting room platform. During the third quarter of fiscal 2021, Walmart unveiled an additional investment in India’s Ninjacart, for technology and supply-chain solutions. Apart from this, the company’s contracts with Symbotic, Goldman Sachs, Shopify (SHOP - Free Report) , Green Dot and Microsoft; buyouts of ShoeBuy, Moosejaw and Bonobos among others, underscore its digital efforts. The buyout of major stake in Flipkart has been bolstering its International segment.

The U.S. e-commerce sales rose 6% year over year, while it soared 103% on a two-year stack basis. Walmart Connect advertising sales surged 95%. At Sam’s Club, e-commerce sales jumped 27% on the back of a robust direct-to-home show and solid curbside performance. In the International segment, e-commerce sales surged 86%. Management projects global e-commerce sales of $75 billion for fiscal 2022. This is likely to further strengthen this Zacks Rank #2 (Buy) company’s omnichannel status.

Shares of Walmart have rallied 17% in a year’s time compared with the industry’s rise of 18.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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