(Bloomberg)—In a sign of the intensifying battle for New York’s online shoppers, Wal-Mart Stores Inc. acquired Parcel, a company specializing in same-day deliveries of groceries and meal kits.
The world’s largest retailer, No. 3 in the Internet Retailer 2017 Top 500, plans to use the business to offer free, same-day delivery in New York City—the most populous city in the U.S.—as it continues to push into e-commerce to compete with Amazon.com Inc. (No. 1). Walmart announced the purchase on its website, saying it paid less for Parcel than other acquisitions made this year, without giving more details on the terms.
Walmart has sought to leverage its way into e-commerce through a string of acquisitions. It agreed to pay $310 million in cash for online apparel seller Bonobos Inc. (No. 232) earlier this year. In 2016, it purchased Jet.com Inc. for about $3.3 billion, with the website’s founder Marc Lore going on to become head of e-commerce for Walmart.
“New York City is the top market for both Jet and Walmart.com, and because of the density of the area—along with the proximity of our fulfillment centers—it’s the perfect place for high-impact innovation,” Nate Faust, senior vice president for the retailer’s e-commerce supply chain, said in a post on the company blog. “This acquisition allows us to continue testing ways to offer fast delivery while lowering our operating costs.”
Outside of New York, Walmart and Jet have offered free two-day shipping for orders of $35 or more, an attempt to blunt the popularity of Amazon’s two-day guarantee for members of its Prime program.
Target Corp. (No. 20) offers same-day delivery for in-store purchases to parts of New York City for a fee and will broaden that offering to more cities next year. In August, Target agreed to acquire a software company that manages same-day and local deliveries. Grand Junction, a San Francisco-based startup that links retailers and other distributors to a network of more than 700 carriers across North America, handles Target’s same-day delivery service for its store in Manhattan’s Tribeca neighborhood.
At the end of August, electronics retailer Best Buy Co. (No. 10) expanded its same-day delivery to 27 cities from 13 with delivery service Deliv. Best Buy also said it plans to be in about 10 more markets that Deliv doesn’t cover before the holiday season is in full swing.