FedEx Corp. has been busy as of late.
The carrier announced Monday that it plans to put FedEx Office locations in 500 Walmart Inc. stores over the next two years. The move comes after a pilot with 47 Walmart stores. The deal offers customers packing, printing and shipping services at the locations. Customers also can have online orders that are being delivered by FedEx held at Walmart stores for up to five days.
“The concept is all about providing ease of use for shoppers,” said Carl Asmus, president of FedEx Cross Border, on Wednesday at Shoptalk in Las Vegas. “We know that customers are looking for an alternative to delivery at their homes. It’s really table stakes. If you don’t offer an alternative, it will have a dramatic impact on your conversion rate. Some customers will abandon the purchase.”
FedEx already offers pickup and drop-off services in 7,500 Walgreens stores and at Albertsons Cos. and Kroger Co. grocery stores, Asmus said.
Not counting the 500 new Walmart locations, FedEx offers more than 10,000 locations in the U.S. where shoppers can pick up or drop off shipments, Asmus said. “80% of the U.S. population is within nine minutes of a FedEx location where they can pick up or drop off a shipment.” And FedEx is inching closer to getting to the point where 95% of the U.S. population is five minutes away from a FedEx location, he said.
The 47-store Walmart pilot was “unbelievably successful,” Asmus said, as shoppers taking care of their deliveries often bought something at Walmart, Asmus said. Walmart is No. 3 in the Internet Retailer 2017 Top 500. Walgreens is No. 39.
The deal follows similar moves by Amazon.com Inc. (No. 1) to place lockers in Whole Foods stores where shoppers can deliver and return Amazon packages, and a deal with Kohl’s where the retail chain will allow Amazon customers to return their online orders. Kohl’s will pack and ship those returns, free of charge to Amazon return centers. The service is available at around 80 Kohl’s stores in the Chicago and Los Angeles areas. Shoppers do not need to have their Amazon orders in the original packaging in order to complete a return, Kohl’s (No. 18) says.
FedEx isn’t done experimenting, Asmus said, noting that it is “looking at in-home delivery but we have not made the decision to venture into that yet.” While many consumers say they don’t want people coming into their homes to deliver packages, FedEx is looking at a “wide range” of technology providers that offer the service. “A lot of attention has been paid to in-home delivery benefits and risks [at FedEx],” he said.
Walmart in September announced it is testing an online grocery delivery service in Silicon Valley that enables Walmart.com shoppers to place a grocery order and have it fulfilled by a Deliv driver who receives a one-time pass code to open her August Home-branded smart lock and then deliver the order inside the home, even placing perishable items in the shopper’s refrigerator. Amazon in November launched a program where it uses a smart lock and camera device called Amazon Key to deliver packages inside shoppers’ homes.
An Internet Retailer-exclusive survey of online shoppers conducted by Toluna finds 22.1% of respondents said that, if available, they would take advantage of Walmart’s offering and 16.5% would use Amazon Key. A much larger share, 50.9%, would use an Amazon same-day pickup location, and 22.1% would have their Amazon orders delivered to a secure locker in a Whole Foods or elsewhere.
Interestingly, 61.1% of consumers who aren’t interested in Walmart or Amazon’s in-home delivery services said they’re satisfied with the current way that their online orders are delivered. Cost is another consideration, given that Walmart’s program requires users’ homes to be equipped with August Home’s keyless home entry system, and Amazon’s requires an internet-connected, security camera smart-lock package that starts at $250. 46.2% said they don’t want to invest in that technology. Security (47.3%) and safety (34.7%) concerns also were cited by a large share of consumers (they could select multiple responses).
Also at Shoptalk, FedEx launched FedEx Returns Technology, which enables merchants to see every step of a return’s status—including what is being returned and to track the shipment. This will enable merchants to better manage inventory as they will know which items are headed back to the warehouse and to analyze return trends. The FedEx Returns Technology is integrated into more than 1,700 FedEx Office locations across the U.S. At these locations, shoppers only need to print out a return form and drop the item off at the FedEx location. From there, an associate can make sure the item being returned is correct and not damaged and pack and ship the package. Merchants also can opt to refund the shopper immediately after the store employee inspects the product.
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