Salesforce And Walmart Are Teaming Up To Provide Last-Mile Delivery Services

Key takeaways:

• Facing a tough retail environment, Walmart is looking to add revenue by selling its technology to other businesses.
• The deal will help Walmart gain valuable insights into customer needs.
• By partnering with Walmart, Salesforce gets to offer its customers a much-needed business solution to help them grow.

Walmart and Salesforce partnering to offer a delivery service does not make much sense on the surface. However, when you dig down and understand what the partnership provides both parties, it becomes clear that it could be mutually beneficial.

Here are the details about this delivery service and its impact across the retail landscape—plus, how Q.ai can help investors in the space.

What Salesforce and Walmart are offering

Walmart and Salesforce have created a partnership to help small and large retailers offer a buy online and pickup service for their customers through an app known as AppExchange. Walmart is opening up its in-house omnichannel order and delivery system to independent retailers to help them grow their businesses and serve more customers.

The service is intended to help retailers gain access to an online ordering and delivery system that would otherwise be unavailable to small and medium-sized retailers. Salesforce’s role is to supply the technology to the retailer/client, while Walmart gives the retailer the ability to sell under its own name and deliver white-label service from purchase to delivery.

AppExchange makes it easier for retailers to pick an order and have it ready for customer pickup or delivery in less time and with fewer pain points. Retailers can use AppExchange to scale their operations to meet current customer demand.

Impact on retailers

Independent retailers will have access to different services through Salesforce AppExchange. These include a buy online and pickup in-store technology (BOPIS) used by Walmart employees called Store Assist, a business-facing delivery service called Walmart GoLocal, and Salesforce’s Commerce Cloud and Order Management system.

Before the partnership, these services were only available to Walmart and customers who could afford to use Salesforce’s systems. This meant that many smaller retailers were left to use small-scale retail ordering software and figure out how to deliver products promptly.

Retailers can choose which service they want to use as part of their order fulfillment process. Store Assist turns a retail location into a fulfillment center for customers who want to pick up their purchases, which is the software’s primary purpose. A retailer can use Walmart’s GoLocal delivery service, which picks up packages and delivers them to local customers.

Additionally, the software suite allows the retailer to closely manage and monitor their customer’s shopping experience while providing up-to-date information about the completion and delivery of a purchase.

Why Salesforce and Walmart competitors need to worry

Some might say that this move is altruistic on Walmart’s part since it has a reputation for putting local retailers out of business. On the surface, it looks like Walmart is giving retailers a hand by encouraging them to become strong competitors.

What’s really going on is that Walmart is looking to gain further insight into customer needs, determine how to improve its product offerings, and find ways to reduce the cost of operating a local delivery fleet by increasing the number of packages delivered at one stop. Walmart has already signed major retailers, including Home Depot, to its delivery service.

The company aims to earn more money by offering its technology to other retailers and finding ways to gain more insight into the habits of its shoppers. It’s also focused on increasing third-party sales through its website to compete with Amazon.

Salesforce benefits through its management of the software and its users. A retailer that wants to sign up has to go through Salesforce since it won’t be offered through Walmart. Salesforce will handle the IT operations of the software, while Walmart will help with order fulfillment.

Retailers of all sizes stand to benefit from AppExchange since it will help them become more competitive. Combining this with the opportunity to sell on Walmart’s third-party website without losing a business identity results in an opportunity to get away from Amazon’s restrictive warehousing requirements for Prime sales.

Amazon and similar websites stand to lose sellers unless they can pivot and compete with AppExchange and Walmart’s GoLocal.

Impact on Salesforce and Walmart investors

Usually, the introduction of a novel idea that can help a corporation improve its profits is well-received by Wall Street. When the news was announced on January 12, 2022, Walmart’s stock closed down for the day at $144.81 and has seen little movement since.

Salesforce’s stock price was already rising sharply before the news was announced and closed at $149.60 on the day of the announcement. Its stock price has also leveled off in the $148 range. The fact that both of these stocks have seen little movement suggests that Wall Street isn’t sold on the concept as a money maker yet.

It will be important to see updates from both companies on how the service grows over time. Walmart has previously stated that its GoLocal service has made over three million deliveries since launching. While this isn’t going to provide a new revenue stream immediately, in the long run, it has the potential to benefit both companies.

Investors looking to take advantage of technological advancements should look into the Emerging Tech Kit offered by Q.ai. This kit uses artificial intelligence to spot trends in the market and invest accordingly. Since it invests in multiple companies, investors are instantly diversified, helping to reduce some of the risks when investing in the stock market.

The bottom line

Walmart and Salesforce are looking at the long game with their partnership. The insights Walmart can learn about customers will help the retailer by offering an additional revenue stream and addressing more customer needs. At the same time, Salesforce can sign up new customers by providing more add-on services to its current offerings.

That said, investors will have to wait and see how beneficial this agreement will be.

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