A win-win deal: Walmart and FedEx join hands to ease logistics bottlenecks

In today’s multichannel retailing environment, the key to retaining customers is maximum convenience and competitive prices. Over the years, Walmart (WMT) has made significant progress in that direction with an array of customer-oriented initiatives and marketing strategies.

After several successful innovations aimed at easing the delivery process, the Arkansas-based supermarket chain has joined hands with FedEx Corp. (FDX) to take customer experience to the next level.

Walmart expects this partnership to help it stay one step ahead of arch-rival Amazon (AMZN), considering the additional convenience being offered to customers. It is to be noted that even while fighting competition from Amazon, especially in the e-commerce space, Walmart managed to retain its much-touted ‘ethical culture.’

The arrangement with FedEx is seen as Walmart’s answer to Amazon’s tie-up with Whole Foods for its pickup lockers. In a similar gesture, a few months ago, Target (TGT) bought Grand Junction and Shipt to enhance its delivery network.

Though FedEx is already having pick-up and delivery units in Kroger, Office Depot, Walgreens, and Albertsons, the scale of those operations are relatively small.

Taking a cue from the success of its pilot program involving Walmart, FedEx Office will set up stores inside 500 Walmart stores across the country over a period of two years. Under the mutually beneficial program, customers will be offered packing, delivery and printing services. In addition, shoppers can opt to hold their packages in the FedEx stores for a maximum of five business days.

The arrangement with FedEx is seen as Walmart’s answer to Amazon’s tie-up with Whole Foods for its pickup lockers

The decision came after the companies extensively monitored those who visit the 47 FedEx facilities already operating in Walmart stores in North Carolina, South Carolina, Virginia, Arkansas, Texas and Colorado. It was found that nearly 50% of those who visit the FedEx stores also make purchases at Walmart.

Besides, the arrangement lures many new customers, while making it convenient for the stores to handle online order returns.

According to FedEx, what attracted it to Walmart is the retailer’s extensive store presence. Also, the new venture complements their successful partnership in transportation by easing the stress associated with ‘last mile’ deliveries.