business news in context, analysis with attitude

Reuters reports that "Walmart and Target are testing their own home package delivery services in the United States - stealing a page from Amazon's play book - as e-commerce demand strains traditional carriers like United Parcel Service, FedEx and the U.S. Postal Service."

The story says that Walmart "has been trialing its first company-branded 'last-mile' delivery vans … Since January, a small, electric van fleet has made package deliveries in the Bentonville and Rogers areas near Walmart's Arkansas headquarters, company spokeswoman Camille Dunn said. The drivers work for Walmart, which also employs its semi-truck drivers."

Target, on the other hand, "so far is depending on independent drivers from Shipt, which it bought in 2017.  The retailer earlier this year began testing home package delivery from a new sorting center in its hometown of Minneapolis. Workers in that center group packages by zone and hand some over to drivers for Shipt, who use their own cars for deliveries."

The moves mimic how "Amazon has recruited armies of small businesses to provide delivery services from vans emblazoned with the company's logo - an effort that has helped it control customer wait times and costs."

KC's View:

Controlling costs and delivery times are two reasons to do this, but the third reason is just as important - they get to control the customer experience in a way that using a third party contractor does not.

Everybody is going to be looking for differentiators going forward.  (Well, maybe not everyone.  But everyone should be.)  The final yards of the so-called "last mile" could be where the game is won or lost, depending on how retailers approach them.