Walmart (NYSE:WMT) acquired Brooklyn-based logistics startup Parcel last week for an undisclosed amount. The acquisition will help the company offer New Yorkers same-day delivery on purchases. New York City is a market of 8.5 million people without a single Walmart location to shop at.
Walmart said the amount paid was “smaller than previous acquisitions” made this year, which includes Bonobos, Moosejaw, and Modcloth. Sources familiar with the matter are saying the acquisition price was less than $10 million.
Founded in 2013, Parcel’s customers include meal-kit services like Chef’d and Martha Stewart’s Martha & Marley Spoon. Parcel uses leased trucks to get items to where they need to be. Parcel sends order updates to its merchant clients and their customers in real time via text messages. Parcel offers evening deliveries and can also handle perishable and frozen foods.
Nate Faust, senior vice president of Walmart U.S. e-commerce supply chain, said, “Parcel has developed unique expertise delivering to customers in a distinctly challenging and essential market. This acquisition allows us to continue testing ways to offer fast delivery while lowering our operating costs.” Walmart said that Parcel will continue to serve current clients.
The company said in a blog post, “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.” In January, the company announced free two-day shipping to home and stores and later began to discount items that customers buy online and have shipped to Walmart stores. Jet already delivers some orders for no extra fee on the same day they are ordered.
The discount retailer is trying hard to shorten the time it takes to get customers’ packages to their homes. Faust said, “Delivery is increasingly one of the most important elements for today’s online shoppers, as demands for speed, flexibility, and reliability continue to grow.” Last month, Walmart revealed plans for a pilot grocery-delivery program where drivers put customers’ perishable food directly into their refrigerators.
Walmart is currently locked in a fierce battle with Amazon.com, whose Prime members can get free two-hour delivery on some items and same-day delivery for free on some others. In 2013, Walmart began offering free store pickup of groceries purchased online. While the effort began in Denver, it has since been rolled out nationwide. Walmart’s e-commerce grew 63 percent last quarter.