Could Home Depot’s Partnership With Walmart Lead To Other Close Working Arrangements

Home Depot HD is hiring Walmart’s WMT GoLocal delivery service to deliver on the same or the next day. This is the first time two major retailers announced a joint venture and it has implications for the future.

GoLocal is a new service which was started in August 2021. The service, which is nationwide, delivers orders for other businesses. Walmart has indicated that it is already delivering merchandise for other companies, both small accounts and national companies. GoLocal third party drivers deliver the goods. Other details are scant – there is no indication what other companies are using the service to date or what the financial arrangements are.

Home Depot will begin offering GoLocal service in select markets soon with plans to expand the service by the end of the year. It is likely that the service will be operational in many parts of the country in time for Christmas deliveries.

Stephanie Smith, senior vice president of supply chain for Home Depot said her company “is continuously working to give customers the most convenient shopping experience in home improvement, and that includes providing a wide range of fast and reliable delivery options.” She continued “This partnership brings us even closer to our goal of offering same-day or next-day deliveries to 90 percent of U.S. population.”

While Walmart’s GoLocal service is very attractive, it is a surprise that a major U.S. retailer would join them for deliveries. One must ask what lies ahead, and one could see closer cooperation between the two giants. I am hesitant to suggest a complete merger of the two companies, as David Glass, a former chairman who succeeded Sam Walton, suggested could happen at a Morgan Stanley MS meeting in 1989 or 1990 when he forecast that major retail companies will merge. Bloomberg picked up the theme in a recent opinion piece that suggests that a merger of Home Depot and Walmart would make sense since the two companies represent the first and third biggest importers of good through container ships. Their combined strength would give them the ability to lay claim to containers at a time when many retailers are struggling to get goods into the country.

Such a proposal would certainly trigger an intense scrutiny under the anti-trust laws. I would think that egos might also bar such a merger. Who would lead it? Both leaders are qualified, or think they are.

The combination of stores is a challenge that cannot be ignored in the post-pandemic era. Organizations that falter because of lack of associates and companies that lack proper merchandise momentum may be asking themselves where they should turn.

The Home Depot, according to Retail Wire, is building a delivery network relying on third parties to offer fast fulfillment to professional and do-it-yourself customers.

John Fulmer, president and CEO of Walmart U.S. said: “Home Depot shares Walmart’s goals of making fast and reliable local deliveries.”

POST SCRIPT: Collaboration of merchandising marketing and delivery service, is not new. Retailers have shared space. Both of these mega-retailers want to service customers better and find ways to speed delivery. It will reduce operating costs. Third party deliveries are mostly paid for by the recipient.