One of the reasons Amazon (NASDAQ: AMZN) has carved out such an edge for itself is that the online giant has increasingly invested in its network of fulfillment and distribution centers. That, combined with the relationships it's built with couriers, allows it to move products out of its warehouses quickly for rapid delivery.
But now, Amazon may have some stiff competition on the product distribution front. That's because Walmart (NYSE: WMT) recently announced that it will be launching a new delivery service that could give the online giant a run for its money.
Local delivery, taken up a notch
Walmart's latest offering is called GoLocal, and its goal is to move local products quickly so they arrive at customers' doors at rapid speed. But what's interesting about this service is that it's not limited to Walmart products alone. Rather, the big-box giant will be teaming up with a number of national retailers to grow a large network of partnerships, all in an effort to deliver competitively priced products to customers. Just as importantly, it will be teaming up with local businesses, which often lack the resources to get goods out to customers quickly.
GoLocal will be a white-label service, so deliveries won't be made by Walmart-branded vehicles. But the new service will offer consumers affordable shipping rates, as well as the option to have goods delivered in as little as two hours.
Right now, Walmart relies heavily on FedEx to deliver its online orders. So far, it's not clear if FedEx will be tapped for GoLocal or if Walmart will seek to engage other couriers. But either way, Walmart hopes to begin shipping with GoLocal by the end of 2021. It also plans to incorporate newer technologies for faster delivery speeds, like drones and self-driving vehicles.
An ongoing effort
Walmart has actually spent years working to improve its delivery offerings. In 2018, it started its own grocery delivery service, and in 2020, it launched Walmart Fulfillment Services to compete with Amazon and other marketplace-based retailers. Now, it's sinking even more resources into establishing a shipping network that could surpass Amazon's already impressive delivery times.
The real estate investor impact
If Walmart is able to get its products, and those of other retailers, out quickly, it could take more business away from Amazon. And that's generally a good thing for physical retailers.
For years, Amazon has been drawing customers away from local businesses, putting more at risk of closures. And business closures are the last thing any real estate investor should want.
If Walmart's GoLocal initiative is successful, it could help ensure the longevity of more stores. And if it makes good on its plan to expand its partnerships, commercial landlords across the country may have fewer store closures to worry about in the coming years.
Of course, GoLocal could also end up serving as another essential revenue stream for Walmart. And while the big-box giant isn't exactly starved for revenue these days, securing another income source is never a bad thing to do.