Walmart Acquires NYC Logistics Startup To Ensure Faster Deliveries

Parcel, a logistics startup based in New York City, has been acquired by Walmart at a price of under $10 million. The startup had previously raised approximately $2 million from its investors. According to the head of e-commerce at Walmart, Marc Lore, the retail giant will soon start offering same-day delivery services in the city of New York.

Some of the firms that Parcel handles same-day and scheduled delivery services for in New York City include Bonobos, a clothing online retailer; Chef’d, a meal kit company and Martha & Marley Spoon, a firm owned by Martha Stewart. While Parcel will keep those clients, the giant retailer will use the delivery employees-network and the technology of the startup to ramp up a same-day delivery service in the city for both Walmart.com and Jet.com.

Free same-day delivery

Jet.com which was acquired last year by Walmart at a price of $3.3 billion already offers same-day delivery services at no cost. By acquiring Parcel, Walmart is hoping to cut the costs of making deliveries. Walmart.com will also begin a same-day delivery pilot in New York City where frozen and fresh groceries will be offered as well as general merchandise.

Parcel has created a database of every building in New York City that it has made deliveries to and this includes photos as well as other information such as service entrances. The logistics startup offers delivery updates in real time both to sellers who use its service and their customers through text messages. Walmart is thus banking on the fact that the knowledge and expertise that Parcel has gained over the years in the city of New York will assist in competing with Amazon.

Lucrative market

“Parcel has developed unique expertise delivering to customers in a distinctly challenging and essential market. This acquisition allows us to continue testing ways to offer fast delivery while lowering our operating costs,” said a Walmart’s senior vice president, Nate Faust, in an online posting.

This is the latest attempt by Walmart to compete on the same level with online retail giant Amazon with regards to distribution. Members of Amazon’s loyalty program Prime already get two-hour delivery at no cost for daily essentials. They also get same-delivery services for millions of items.

Following the acquisition the founder and chief executive officer of Parcel, Jesse Kaplan, is expected to join Walmart besides six other full-time employees of the logistics startup. Another 50 or so employees who work part-time for the startup in sorting and deliveries will also be absorbed by Walmart.

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