The Friday Report: August 20, 2021

Walmart’s New Business:  Last Mile Delivery

Walmart is launching Walmart GoLocal, a new white label delivery service for companies other than its own.  The new service includes product delivery with multiple timelines and complex delivery requirements.  Walmart GoLocal has already secured arrangements with numerous retailers and is open to accepting more merchant partners.

Walmart GoLocal can offer a service bundle because of its strategic partnership with Adobe Commerce.  As of early 2022, Adobe Commerce U.S. retail customers will be able to access Walmart’s omnichannel technology, but pricing has yet to be announced.

The commercialization of Walmart’s capabilities and technologies will help the company to continue to invest into its customer value proposition.  Walmart revenue increased 6.7 percent this fiscal year and its e-commerce revenue increased 79 percent. 

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New Reach:  Maersk Buys Up of U.S. and European E-Commerce Logistics

Visible Supply Chain Management, a B2C logistics company specializing in fulfillment services and parcel delivery has been acquired by A.P. Moller-Maersk, the world’s largest container line.  In addition, Maersk announced its intention to acquire B2C Europe Holding, B.V., a Dutch B2C parcel delivery company based in the Netherlands.

Maersk explained that it acquired both businesses to combine the operating models and value proposition of each business with the integrated logistics approach and services Maersk provides.  Maersk currently invests in digitization and integration and will leverage the acquisitions to provide it with a strong growth platform in e-commerce, enabling its customers to sell across multiple channels flexibly and effectively.

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Online Retailers Improve Returns Processing

Online sales volume nearly quadrupled over the period of Q1 2020 to Q1 of 2021, largely due to lockdowns and store closures resulting from the COVID-19 pandemic.  E-commerce sales have still been booming in 2021, with online sales accounting for nearly 23 percent of the market.

Managing returns, however, has been a significant problem.  Reverse logistics costs reached nearly 60 percent of the original sales price.  E-commerce returns have always been challenging, affecting nearly one third of all online purchases.  67 percent of all consumers review returns policies before making purchases online and report that they will forego buying from a retailer that does not provide a seamless returns experience.

In surveys, consumers recorded a preference for dropping off returns at convenient locations rather than traveling to the store or shipping goods back to retailers.  Amazon’s partnership with Kohl’s, for example, provides a physical location which processes returns for goods purchased online.  While concierge service vendors like Loop Returns and Happy Returns can process returns, these services are not in widespread use.

Retail industry experts anticipate that there will be increased interest from retailers in using returns as a service (RaaS) for reverse logistics services in the future.

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