Walmart (WMT) - Get Report isn't backing away from the challenge of remaining retail's leading company. Like many other major other retailers, the company has suffered as Amazon takes an increasingly large bite of retail sales.
On Friday, Walmart announced that it will team with Lyft and Uber to deliver goods faster. Walmart will test Lyft in Denver and Uber in Phoenix for same-day grocery delivery. The ride-sharing industry leaders normally compete against each other. The arrangement could boost profits for investors.
The initiative follows others to bolster Walmart's online presence and compete more effectively with Amazon, whose success story has been incredible: The e-commerce giant has become America's one-stop shop for just about everything not only because of the variety of goods it offers but also because of its speedy delivery. Bricks-and-mortar companies have been unable to match Amazon's effectiveness, and over few years, the share prices of such major companies as Sears and Macy's have declined.
But Walmart has earmarked as much as $2 billion to improve its e-commerce presence. The company has undertaken initiatives such as a service that will allow customers to purchase groceries online and pick them up outside Walmart stores.
Regarding the Lyft and Uber initiatives, a customer orders from a special selection of groceries and similar goods online. A Walmart employee will then use one of the ride services for delivery.
For now, the service will apparently work independent of ShippingPass, a membership service that is similar to Amazon Prime. Consumers will pay standard Walmart shipping fees, but will receive goods either the same day or on a scheduled date.
If it works according to plan, this could be a win for all parties. Customers will get their groceries quickly, Walmart will lose less of its grocery market share to Amazon, and the ride-sharing services will test their abilities as delivery services, which many analysts are projecting as the industry's next step.
Investors in Walmart stand to be the biggest winners. This company remains the best of the traditional brick-and-mortar retail bunch largely because it has been able to adapt to changing conditions.
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This article is commentary by an independent contributor. At the time of publication, the author held on positions in the stocks mentioned.