TechCrunch reports that delivery service DoorDash has decided to end its business relationship with Walmart, effective the end of September, saying that the arrangement no longer was "mutually beneficial" and that it wanted to focus instead on "long-term customer relationships."
The story notes that "the termination will end a partnership that began in April 2018 as a pilot to deliver Walmart groceries to customers in the Atlanta metro area. Since then, the partnership expanded to states across the country.
"Although Walmart has partnered with third-party delivery services like DoorDash, the retail giant has also been focused on building out its own delivery efforts."
For example, Walmart said last week that it plans to purchase Delivery Drivers, described as "the company behind Walmart’s Spark platform that sees gig workers deliver orders to customers. A Walmart spokesperson told Insider that the Spark platform has grown to become the company’s largest delivery service provider and that it accounts for 75% of Walmart deliveries."
Delivery Drivers reportedly has informed its non-Walmart customers that it will end its relationship with them, effective in 30 days.
At the same time, TechCrunch reports, DoorDash "has geared up to collaborate with another notable brand, Facebook parent Meta. DoorDash confirmed earlier this week that DoorDash Drive is now in the early stages of testing a service that will allow DoorDash drivers to pick up and drop off Facebook Marketplace items to customers.
"DoorDash and Meta are currently offering the test service in several cities in the United States."
As for Walmart and DoorDash, the breakup, on the surface at least, seems amicable.
“We’d like to thank Walmart for their partnership and are looking forward to continuing to build and provide support for merchants in the years ahead with our leading Marketplace and Platform offerings,” a spokesperson from DoorDash told TechCrunch.
"We’d like to thank DoorDash for their partnership and support of our customers the past several years,” a spokesperson for Walmart told TechCrunch in an email.
- KC's View:
I'm sure that DoorDash looked at Walmart's strategies and tactics, as it looked to take greater control of its own distribution infrastructure, and decided that there was no time like the present to break it off - better to be positioned to invest in new relationships with greater possibilities than to continue spending time on a relationship without long term potential.
The timing may not have been convenient for Walmart, but they'll be just fine. I've been saying all along that it made no sense for companies like Walmart, with near limitless resources, to outsource this stuff. Better ton control as much of the system as possible, and make it part of your brand identity and, yes, responsibility. The approach carries risk but also, I think, great rewards if they get it right.