Why Does Walmart Not Want To Partner With Instacart For Grocery Delivery?

Posted by John peterson on February 9th, 2021

In few months back, Walmart has announced a grocery partnership with competitor delivery startups like DoorDash, and Postmates. Walmart is already partnered with Uber and delivery startup Delivery. In short, Walmart is supposed to collaborate with four companies to expand its grocery delivery service to more than 100 metro cities by the end of this year. But it is quite surprising that Walmart has not named Instacart as a delivery partner to deliver groceries online. According to reliable sources, the company is not likely to partner in the future as well if things don't change. It is quite shocking for many business analysts. 

What is Instacart? 

You should know that the Instacart is a popular grocery delivery and pick-up service company with a billion valuation. Headquartered in San Francisco, California, Instacart operates in around 5,500 cities across the United States and Canada. Instacart was founded by Apoorva Mehta, a former Amazon employee and a serial entrepreneur. Instacart offers its services via mobile app and website. It allows customers to order groceries from the specific retailers with grocery shipping is done by a personal shopper. 

Still, Walmart does not want to partner with Instacart. But why! 

Instacart basically wants Walmart to list its grocery items for sale on the Instacart's app. In contrast, Walmart simply wants to use Instacart delivery people to fulfill grocery orders that are exclusively processed through Walmart's own digital properties. In simple terms, Walmart wants to partner with Instacart only for the grocery delivery.  

This is likely to limit the financial growth for Instacart, which usually generates revenue through commissions from grocers in exchange for creating new demands. If Instacart acts as a delivery network, it will have limited ways to make money. 

Such partnership will go against the works done by Instacart to make an app by allowing all popular grocers to list their grocery catalogs within the Instacart app.

Walmart is the largest grocer in the USA. Instead of partnering with Instacart, Walmart has invested in training its workforce to pick groceries off-store shelves to strengthen their grocery delivery business and grocery pick-up option.

Earlier, Walmart wanted to partner with Instacart to better compete with Amazon in online grocery delivery, and the Walmart Instacart Partnership news circulated all across.  

What does Brittain Ladd suggest to Walmart? 

The popular business analyst and coach Brittain Ladd has questioned the partnership. He believes that Walmart's agreement with Instacart indicates that Walmart is suffering from a leadership failure. Also, Walmart is suffering from innovation and execution when delivering groceries online. It directly means that Walmart cannot do last-mile delivery.

In the article, Brittain Ladd has given Walmart some valuable tips to deliver groceries profitably. For instance, he has emphasized increasing order density that will allow Walmart to leverage their associates to deliver groceries profitably. 

Setting-up micro-fulfillment centers is the best way to increase the order density and reduce the last-mile delivery costs. He has suggested that Walmart should contact Louis Borders because it has created a magnificent online grocery fulfillment model that Walmart can leverage to its advantage.  

Final words  

There are many more things that Walmart should do to improve grocery delivery. Brittain Ladd has analyzed this partnership and explained why Walmart should not partner with Instacart in his article posted on its official website.