Walmart, the nation’s largest bricks-and-mortar retailer, is launching a novel delivery service to help counter competition from online retail giant Amazon.
Amazon’s overwhelming advantage: Dozens of warehouses and distribution centers in 28 states, which make it easy to ship packages to online customers’ front porches within a day or so, and provide same-day delivery in many urban areas.
Walmart has moved aggressively into online retail, but lacks the delivery infrastructure to challenge Amazon for market. What it does have, however, are more than 5,000 stores (including Sam’s Club warehouse club locations) and more than 1.4 million retail employees, most of whom drive to and from work.
Walmart’s new strategy to beat Amazon: Turn some of those store employees into part-time delivery drivers.
The plan, rolled out on a trial basis this spring in Arkansas and New Jersey, works like this: Employees who volunteer will load up their cars with goods that customers have ordered online and deliver them on routes that roughly correspond to their regular commutes. An app matches employees with convenient delivery routes. Walmart pays the workers extra, including overtime if they have already put in full workweeks.
Advice: Tempted to try something similar? First, have your attorney review your plan. Generally, you will have to pay employees who make the deliveries, but you may also have to find a way to compensate them for gas, vehicle maintenance and insurance coverage (including any extra required liability coverage).
Don’t forget that you will potentially be liable for any damage done by your new drivers. Plus, you will have to develop systems to confirm employees have valid drivers’ licenses, adequate insurance coverage and a properly registered vehicle. Depending on the type of vehicle your delivery persons use, you may even have to comply with special regulations affecting commercial drivers.