Business Behind Walmart Delivery App: Insights for Entrepreneurs & Startups

Walmart’s transformation from a traditional retail giant to a major player in the digital e-commerce space has been a noteworthy journey. The Walmart Delivery App plays a significant role in Walmart’s strategy to meet consumer demand for fast and convenient shopping.

With services ranging from same-day delivery to membership perks, Walmart is leveraging its vast infrastructure to deliver a unique customer experience. The Walmart app supports online pickup and delivery services from over 4,000 Walmart locations.

This blog will explore the Walmart delivery model in detail, providing key insights for entrepreneurs, businesses, and startups seeking inspiration from Walmart’s approach to scaling in the competitive e-commerce domain.

TL;DR

The Walmart Delivery App has contributed in a big way to the retail giant’s digital transformation, utilizing its vast store network to offer efficient same-day and curbside pickup services. By combining in-house inventory with third-party partnerships, Walmart provides a diverse product range, enhanced by its subscription service, Walmart+.

With Amazon Prime Now, Instacart, and others in the fray, Walmart stands out with its extensive infrastructure and value-driven approach. Leveraging advanced AI, mapping technologies, and a robust tech stack, the app continues to grow in the competitive e-commerce space.

Entrepreneurs can draw key insights from Walmart’s hybrid model and its strategic use of technology to meet evolving consumer demands.

Starting Points For Online Shopping Journey In 2023

Walmart Delivery App Overview

Evolution of the Delivery App

The Walmart Delivery App was launched in 2013 as part of Walmart’s larger digital transformation strategy. Walmart aimed to capture mobile and on-the-go customers. The app’s evolution included the addition of new features, such as the ability to order groceries, access Walmart+, and set up in-store pickup.

Unique Selling Proposition (USP) of Walmart Delivery App

The Walmart Delivery App stands out due to its ability to offer both low-cost delivery and access to a wide range of products, from groceries to electronics. Unlike many competitors, Walmart’s USP includes its robust supply chain and established physical store network, allowing for efficient inventory management and rapid order fulfilment.

Walmart also leverages economies of scale to keep costs low for customers, a competitive advantage that resonates well in the value-driven U.S. market.

How Walmart Leverages Its Vast Network for Competitive Delivery Options

With thousands of stores across the U.S., Walmart uses its local stores as distribution centers to fulfil online orders quickly. This enables Walmart to offer competitive same-day and next-day delivery options by tapping into store inventory rather than relying solely on centralised warehouses.

Business Model of Walmart Delivery App

Order Fulfilment Model

In-House Inventory vs. Third-Party Fulfilment

Walmart’s delivery app utilises both in-house inventory and third-party partnerships. For in-house items, Walmart relies on its local stores to serve as mini-fulfilment centers. However, it also partners with third-party sellers to expand its online selection.

This hybrid approach allows Walmart to balance inventory control with marketplace flexibility, attracting more customers by offering a wide array of products.

Same-Day Delivery and Pickup

Integration of Same-Day Delivery and Curbside Pickup

The app offers same-day delivery and curbside pickup options, blending convenience with speed. Customers can place orders for same-day delivery on eligible items or opt for curbside pickup to avoid delivery fees.

Curbside pickup has proven popular among shoppers, allowing them to retrieve orders without leaving their cars. This model caters to both time-sensitive customers and those who prefer in-store interactions.

Online Purchase Timing and Last Month’s Spending

Revenue Model of Walmart Delivery App

Subscription Services (Walmart+ Membership)

Benefits for Walmart+ Members, Including Free Delivery

Walmart+ is Walmart’s answer to Amazon Prime, offering benefits like free delivery on eligible items, fuel discounts, and in-store scan-and-go options. For a monthly / annual fee, unlimited free delivery is offered to Walmart+ members.

The subscription model enhances customer loyalty and provides Walmart with a steady revenue stream, further integrating customers into Walmart’s ecosystem.

Delivery Fees and Charges

Fee Structure for Non-Members and Additional Charges

Non-members can still access delivery services, but they’re subject to delivery fees, which vary based on order size, distance, and urgency.

By offering flexibility with pay-per-order delivery, Walmart caters to occasional shoppers while incentivizing regular users for having adopted Walmart+.

Partnerships and Advertising

Partnered Brands, In-App Ads, and Affiliate Partnerships

Walmart has diversified its revenue through partnerships with other brands and by offering in-app advertising. Partnered brands can gain visibility within the app, while Walmart also uses affiliate partnerships to extend its reach.

This multi-channel approach allows Walmart to create additional revenue streams and enhances the app’s value by offering a curated shopping experience with relevant promotions and product recommendations.

Retail e-commerce sales compound annual growth rate (CAGR) from 2024 to 2029, by country

Revenue Generation and Financial Growth

Walmart’s Earnings from E-commerce and Delivery Segments

Walmart’s e-commerce and delivery services have been rapidly expanding, especially post COVID-19 pandemic. These services have contributed significantly to Walmart’s overall revenue, with quarterly e-commerce sales in the U.S. consistently growing YoY.

The company’s revenue from its online segments now accounts for a substantial portion of total revenue, aided by Walmart+ subscriptions and same-day delivery options.

Projected Growth and Contribution to Walmart’s Overall Revenue

Walmart aims to maintain high growth rates in its digital channels, projecting robust contributions to its revenue through expanded e-commerce services and delivery options. Growth strategies involve leveraging Walmart+ and expanding product categories available through delivery.

Tech Stack Behind Walmart Delivery App

Mobile App Development Frameworks

Tools and Languages: Walmart’s mobile app utilizes native development frameworks, primarily Swift for iOS and Kotlin for Android, which ensure efficient, high-performance apps optimized for each platform.

The app also leverages React Native for faster cross-platform development in some modules, allowing consistency across devices.

AI and Data Analytics

Walmart integrates advanced AI solutions for demand forecasting, inventory management, and personalisation. AI algorithms predict customer demand based on browsing and purchasing behaviour, while data analytics refine the supply chain to reduce out-of-stock incidents and manage inventory efficiently.

Location and Mapping Technology

For location services and route optimisation, Walmart employs technologies such as Google Maps API for delivery tracking and Here Technologies for route optimisation. This tech stack supports drivers with accurate navigation and delivery tracking for timely order fulfilment.

Pros & Cons of Walmart Delivery App

Pros	Cons
Extensive reach and availability across the U.S.	Delivery fees for non-members can be high for small orders as well
Competitive pricing, particularly for Walmart+ members	Limited availability of some services in rural or remote areas
Variety of delivery options, including same-day delivery and curbside pickup	Dependence on local store inventory, which may affect availability
High product variety, including grocery and household essentials

Walmart Marketplace: Walmart seller statistics and insights

• 73% of all Walmart marketplace sellers earned around 20% profit.
• 50% of all small-to-midsize sellers earned over $100,000 annually.
• Walmart’s marketplace offers over 80 million unique products.
• Walmart’s marketplace contributes to 6.5% of online sales in the U.S.
• Walmart Fulfilment Service provides around 25% of sales on Walmart’s Marketplace.
• Walmart Marketplace charges a referral fee of 6% to 20%.

In-app purchase revenue trend by platform (normalized)

Competitors of Walmart Delivery App

Amazon Prime Now:

Overview: Amazon Prime Now provides ultra-fast delivery, often within 2 hours, catering to the same-day delivery market and competing with Walmart on a broad range of products.

Unique Selling Points: Amazon leverages its vast logistics network and powerful AWS infrastructure, offering extensive product availability and quick delivery.

Instacart:

Overview: Instacart partners with various grocery stores, offering one-hour delivery and a broad grocery selection. It doesn’t own its stock but acts as a service provider for various stores, including Walmart’s competitors.

Unique Selling Points: Instacart’s broad partnerships and gig economy-based model gives it flexibility but drives up service fees.

Target’s Shipt:

Overview: Acquired by Target, Shipt provides same-day delivery services from both Target and a network of other retailers. Like Instacart, it connects customers with gig-based shoppers.

Unique Selling Points: Shipt’s same-day delivery on groceries and household essentials, along with its membership discounts, makes it an appealing alternative.

DoorDash:

Overview: Originally focused on food delivery, DoorDash has expanded into grocery and convenience store deliveries, partnering with local and national stores.

Unique Selling Points: DoorDash’s strengths are its last-mile delivery expertise and ability to deliver quickly from local stores.

Conclusion: Walmart Delivery App

Walmart has successfully leveraged its extensive physical and logistical infrastructure and captured 37% in Q2 2023, to establish a strong digital presence in the U.S. e-commerce market. The Walmart Delivery App exemplifies how traditional retail can evolve and compete with digital-first giants by adopting innovative technology and customer-centric strategies.

For entrepreneurs and startups, Walmart’s approach offers valuable lessons in blending physical and digital resources, building consumer trust, and optimising delivery processes. As the e-commerce landscape continues to grow, Walmart’s strategic evolution provides both inspiration and practical insights.

FAQs: Walmart Delivery App

1. How does Walmart’s delivery app work?

The Walmart Delivery App allows users to place online orders from local Walmart stores. They can choose between delivery and curbside pickup options, with additional benefits for Walmart+ members.

2. What is the cost of Walmart’s delivery services?

Walmart offers free delivery for Walmart+ members. For non-members, delivery fees vary depending on the order size and location, starting from around $7.95 per order.

3. What types of products can I order through Walmart’s Delivery App?

Walmart’s Delivery App offers a wide range of products, including groceries, household essentials, electronics, clothing, and more.

4. How does Walmart’s delivery app compare to Amazon Prime?

While both offer fast delivery options, Walmart focuses on integrating grocery and household goods, while Amazon offers a wider range of products. Walmart’s app is more aligned with its physical retail locations, making it a unique option for grocery delivery.

5. Does Walmart offer same-day delivery through the app?

Yes, Walmart offers same-day delivery in select locations, based on product availability and local demand.