Walmart Teams Up With Instacart Trying to Catch Up to Amazon‘s Dominance

Amazon surpassed Walmart as the #1 global retailer by revenue in early 2021, seizing the top spot that Walmart held for seven years straight. According to eMarketer, Amazon pulled in $613.80 billion in global retail sales in 2021, while Walmart trailed at $566.83 billion.

To put that gap into perspective, the $47 billion difference amounts to Walmart losing out on roughly three times Macy‘s entire 2021 U.S. retail revenue ($24.46 billion).

Walmart vs. Amazon Key Stats:

It‘s clear from the trajectories that Amazon still has vastly more momentum than the Bentonville, AR behemoth. Yet Walmart isn‘t waiting around to let Jeff Bezos & Andy Jassy extend Amazon‘s lead even further.

Walmart is now taking the fight straight into the ecommerce arena through major digital initiatives…including a partnership with Instacart.

Why Walmart Teamed Up With Instacart

Instacart presented an openings for Walmart in a few key ways:

1) Gain Urban Foothold Where Walmart Stores Can‘t Go

Real estate limitations prevent Walmart Supercenters (average 180,000 ft2!) from entering dense cities like NYC and SF. Instacart makes Walmart accessible in major metros without the huge capital costs required to build urban stores.

2) Compete on Amazon‘s Turf of Quick, Convenient Delivery

Through 1- and 2-hour delivery options, Instacart can match the immediacy that helped Amazon capture younger city dwellers. Rapid fulfillment leaves no reason to deal with Whole Foods crowds or unreliable subway trips while carrying loads of groceries.

3) Expand Offering into New Categories

Beyond extending its grocery arm, Walmart broadens its ecommerce selection substantially through Instacart without bearing the costs of stocking slower-moving SKUs in physical stores. Shoppers gain access to over 30 additional departments.

4) Quietly Develop Urban Ecommerce Capabilities

Coordinating speedy delivery of thousands of items throughout congested cities poses numerous logistical hurdles. The Instacart collaboration serves as a testing ground for Walmart to sharpen its local fulfillment operations.

How Widely Available is Walmart on Instacart?

Since first launching the Instacart partnership in September 2020, Walmart has taken a slow expansion approach likely to iron out any execution issues before aggressive broad-based rollout.

As of late 2022, Walmart Instacart was active in selected zip codes of these five U.S. cities:

• Los Angeles, CA
• San Francisco, CA
• San Diego, CA
• Tulsa, OK
• New York City, NY

Within NYC, the service reaches the boroughs of Brooklyn, Queens, and the Bronx. But interestingly Walmart Instacart has not yet extended into Manhattan.

Walmart Instacart Ordering Experience

I gave the Walmart Instacart experience a test drive, placing an order from Queens, NY.

The interface looks identical to a standalone Instacart store…because that‘s exactly what it is from a technical perspective. Shoppers can browse and search Walmart‘s listings just like any retailer on the platform.

One disappointment was the app and website only display Walmart‘s grocery inventory and about 8 other departments. Key categories like clothing, shoes, jewelry, electronics, office supplies, auto accessories and more were all missing.

Hopefully Walmart expands the selection over time through Instacart. But it seems the focus is currently only around household essentials, rather than every product area.

Delivery Times & Fees

I placed my test order ($49 batch of pantry staples and refrigerator items) at 5:45 PM EST on a Wednesday.

The only delivery option was Next Day between 12 PM and 2 PM. No same day or 1 hour windows available.

However, the fees remained consistent with standard Instacart pricing:

• Delivery Fee: $3.99
• Service Fee: $2.45
• Tip: $10

So the total convenience charge rang up at $16.44. Definitely pricier than a self-shopping trip, but expected for Instacart.

At least Walmart maintained its value positioning on the actual grocery pricing. And Instacart provided an easy urban delivery solution where Walmart.com shipping times would have been 3-5 days.

For Walmart Instacart, the biggest opportunity lies in broadening product selection and speeding up fulfillment times to win over more city shoppers. But in the markets launched so far, Walmart succeeded in matching Amazon on omni-channel accessibility through Instacart.