Walmart.com will soon begin offering same-day delivery to some customers in New York City, and it has purchased a local startup to help it with the behind-the-scenes logistics.
Walmart has acquired the logistics startup Parcel to help launch same-day delivery in New York City
The deal was small but key to Walmart’s new express delivery service.
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.
The giant retailer has acquired Parcel, a Brooklyn, N.Y.-based company that handles scheduled and same-day delivery services in New York for online retailers like Bonobos and meal-kit companies like Chef’d and Martha Stewart’s Martha & Marley Spoon.
Parcel will continue to serve those clients, but Walmart will also utilize the startup’s technology and network of delivery employees to ramp up its own same-day delivery offerings for both Jet.com and Walmart.com in New York City.
Jet already delivers some orders for no extra fee on the same day they are ordered, and Walmart believes Parcel will help it reduce the operating costs associated with those deliveries. Walmart.com will also start testing same-day delivery in the city soon, and both Jet and Walmart will offer both general merchandise as well as fresh and frozen groceries as part of these new express delivery options.
Parcel sends order updates to its merchant clients and their customers in real time via text messages. The startup has also compiled a database of every New York City building it has delivered to, including photos and detailed information on service entrances.
“New York City is a really unique and complicated market, and that mastery is really rare,” Parcel founder and CEO Jesse Kaplan said in an interview.
The deal comes as more shoppers expect to have the option for same-day delivery when placing online orders, especially when buying consumable products that get everyday use. Not only does Amazon offer Prime members free two-hour delivery on a limited assortment of goods, it also lets these customers get same-day delivery for free on a catalog of more than a million products.
Walmart and Parcel both declined to reveal the acquisition price, but a source told Recode it was less than $10 million. Parcel, which was founded in 2013, had raised just $2 million from investors, and had pivoted from a consumer-facing startup to a business-to-business startup about two years ago.
Along with Kaplan, Parcel’s other six full-time employees will also join Walmart. The company’s 45-to-50 part-time employees, who sort and deliver orders, will also move over in the deal.
In the year since it acquired Jet.com for $3 billion, Walmart has also purchased a host online retailers, including Bonobos, ModCloth and MooseJaw under the direction of e-commerce head Marc Lore.
Here’s an interview with Bonobos CEO Andy Dunn from the recent Code Commerce conference, where we talked about the sale of his company and his new role at Walmart.
This article originally appeared on Recode.net.
