Back to top

Walmart Plays Another Card, Adds FedEx Shops to Select Stores

Read MoreHide Full Article

It looks like Walmart Inc. (WMT - Free Report) is unraveling a new card every day to sharpen its competitive flair against Amazon (AMZN - Free Report) . The officially omni-channel retailer, which has become overtly popular for undertaking constant e-commerce strategies, is also trying all means to give consumers new reasons to visit its stores. Evidently, sources revealed that the company inked a deal with FedEx’s (FDX - Free Report) subsidiary, FedEx Office – which will add about 500 new FedEx Office locations inside certain Walmart stores over the next two years.

The agreement, which was unveiled at yesterday’s ShopTalk conference, followed the successful conclusion of a pilot program undertaken by both companies. Incidentally, Walmart and FedEx Office already tested this setup across six states that covered 47 locations such as North Carolina, South Carolina, Texas and Colorado, among others.

Per media reports, the pilot program was quite impressive, as many customers visiting FedEx Offices within Walmart also ended up shopping from the latter – thus boosting the big box retailer’s store sales. Hence, we believe that this deal is likely to augment Walmart’s business by easing consumers’ shopping even further. By adding services like packaging, printing and shipping to its already wide range of products and services, Walmart is likely to emerge even stronger as a one-stop-shop for customers.

Notably, the inclusion of FedEx Office stores within Walmart will also allow customers to process returns in a convenient way. Customers can send their packages to be kept at any Walmart-based FedEx Office store for up to five working days – either directly or through FedEx Delivery Manager. While Walmart and FedEx were already allies for shipping, this store within store expansion is likely to mitigate certain pressures associated with last mile deliveries, which has become a raging issue among retailers. 

Walmart Well Placed in the Retail Game

Incidentally, major bellwethers like Target (TGT - Free Report) and Kroger (KR - Free Report) , among others are also making incessant efforts in the delivery space, to stay firm in an Amazon-dominated world. This is partly clear from Target’s buyout of Shipt and Kroger’s contract with Instacart, to support seamless deliveries. Moving back to Walmart, the company is leaving no stone unturned to expand in the delivery and e-commerce space.

In order to facilitate delivery, Walmart acquired a delivery startup Parcel, Inc., which is a last-mile delivery service and specializes in same-day delivery for perishable and non-perishable products. Other than this, the company’s Walmart Pickup program enables customers to place orders online and then pick them up at a store for free. In other developments, Walmart also partnered with ride hailing services Uber and Lyft for speedy online grocery deliveries. Further, the company continues to test same-day and next-day delivery to enhance its services further.

While these factors and Walmart’s numerous acquisitions and alliances tell the tale of its e-commerce development, the company is also committed toward its stores business. In fact, earlier this week itself, there was a lot of buzz about the expansion of Walmart’s alliance with household services provider – Handy. Well, sources revealed that Walmart is extending its agreement with Handy, which will let customers hire helpers at about 2,000 Walmart stores to install or assemble their purchases of television and furniture. 

 



 

Such strategies have been driving this supermarket giant, which has surged nearly 28.2% in a year, surpassing the industry’s rise of 21.2%. We believe that with such robust endeavors rolled up in its sleeve, Walmart is likely to keep its stellar record intact. Also, with strength across both stores and e-commerce, the Zacks Rank #3 (Hold) company is likely to remain well-placed against Amazon. You can see the complete list of today’s Zacks #1 Rank stocks (Strong Buy) here.

Will You Make a Fortune on the Shift to Electric Cars?

 Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

See This Ticker Free >>



More from Zacks Analyst Blog

You May Like