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Walmart (WMT)-Ford to Conduct Autonomous Vehicle Delivery Tests

Technological advancements have revolutionized the way consumers shop, providing them with a variety of swift and flexible delivery options. The use of technology, especially those powered by AI, have taken last-mile deliveries to new highs. This has enabled retailers to experiment with autonomous vehicles and drone deliveries. Amid the pandemic, autonomous technology based contactless deliveries were in high demand, as consumers looked for ways to meet their daily needs, while avoiding human interaction.

Supermarket giant Walmart Inc. WMT has been coming up with initiatives to elevate delivery services. In latest developments, sources revealed that the company has partnered with Ford Motor Company F and self-driving startup Argo AI to launch autonomous vehicle delivery services. Initial integration testing for such deliveries is expected to begin later this year across three cities in the United States namely Miami, Austin and Washington, D.C. Let’s take a closer look at the recent development and some of the other efforts being undertaken by this supermarket giant to raise its delivery game.

Walmart’s Futuristic Approach to Delivery Systems

Commercial use of self-driven vehicles is not a distant dream as tech and auto giants like Tesla TSLA, Baidu and Lyft as well as several others are focused on its development and testing. The use of these technologies in grocery delivery is being assessed by some of the leading retailers including Walmart, Kroger and the e-commerce biggie Amazon.com Inc. AMZN.

According to market sources, Walmart’s latest move to invest in autonomous vehicle delivery incorporates making use of Ford’s hybrid Escape SUVs that are integrated with Argo AI's self-driving technology. The service is likely to enable the company in providing fast and easy services to customers. By combining Walmart’s retail expertise with Ford and Argo’s advanced self-driving operations, commercial goods and groceries can be delivered efficiently. Walmart’s online ordering platform will integrate Argo’s technology for order routing and package delivery scheduling.

Experts opine that the service is likely to be useful in urban areas, where demand is high and consumers prefer fast delivery modes such as same-day or next-day deliveries. The technologies are likely to offset driver shortages in traditional delivery services. Post testing, the companies expect to roll out and expand the autonomous vehicle delivery services to more cities over time. 

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This is not the first instance where Walmart is venturing into testing the viability of self-driven delivery systems. In 2018, Walmart had tested its self-driving delivery with Ford. It also collaborated with self-driving vehicle startups Gatik and Nuro to explore delivery through autonomous vehicles. In April 2021, Walmart made an investment in San Francisco-based autonomous vehicles company, Cruise, owned by the General Motors Company.  

Apart from self-driving vehicle deliveries, this retail behemoth has been exploring opportunities in drone delivery. Walmart has invested in DroneUp, after running successful trials during the pandemic. It is also piloting drone delivery in the United States with Flytrex and Zipline.

To bolster its delivery unit, the company has invested in HomeValet, introduced the Carrier Pickup by FedEx and launched the Walmart+ membership program among others. Walmart’s Express Delivery solution helps fulfill orders in less than two hours. The company’s alliance with DoorDash, Instacart as well as efforts to expand Scan & Go services are also noteworthy. In earlier developments, Walmart teamed up with Point Pickup, Roadie and Postmates as well as acquired Parcel to enhance its delivery service.

The omnichannel retailer is undertaking every effort to develop a futuristic and well-coordinated delivery network that spans across the streets, sidewalks and the skies. Such efforts are helping the company maintain a strong footing in the retail space, wherein players are in a competition to develop best-in-class last mile delivery ecosystems.

Shares of this Zacks Rank #2 (Buy) company have increased 4.9% in the past three months compared with the industry’s rise of 4.7%.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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