Walmart has acquired a delivery startup based in New York City, Parcel, as it prepares to begin providing same-day delivery services to residents of the city. The Brooklyn-based startup handles same-day and scheduled delivery services for online retailers such as Bonobos as well as meal-kit firms such as Martha & Marley and Chef’d in New York. Following the acquisition Parcel will not drop its old clients.
With the acquisition Walmart intends to make use of Parcel’s technology as well delivery network to increase sales under the same-day delivery program for both Walmart.com and Jet.com in New York City. Besides Parcel’s delivery employee network, Parcel has created a database of all buildings in New York City that it has made deliveries to. The database includes photos as well as detailed data on service entrances. Parcel sends updates on orders to both its merchant clients as well as their customers via SMS in real-time.
In the case of Jet.com, the e-commerce site already offers same-day delivery at no extra cost and the acquisition will assist Walmart in reducing the operating costs of those deliveries. It is also understood that Walmart.com will launch the same-day delivery on a pilot basis in the city. The two e-commerce sites will offer frozen and fresh groceries as well as general merchandise with the new delivery options.
“We plan to leverage Parcel for last mile delivery to customers in New York City—including same-day delivery—for both general merchandise as well as fresh and frozen groceries from Walmart and Jet,” Walmart wrote in a blog post.
Walmart’s acquisition of Parcel is coming at a time when demand for same-day delivery services is rising among more and more shoppers especially with regards to consumable products that are used on a daily basis. In the case of Walmart’s online retail rival, Amazon, members of the Seattle, Washington-based e-commerce giant’s loyalty program Prime are offered a two-hour delivery service on a range of limited goods at no extra cost. Same-day delivery is also offered to Prime members on products numbering over a million for free.
While details of the deal’s value were not revealed, Parcel was acquired for under $10 million according to sources. The delivery startup which was launched four years ago has so far raised $2 million from its investors. Parcel’s six employees will join Walmart under the deal as well as part-time employees numbering between 45 and 50 who work in delivery and sorting.