General Motors Co.'s (GM, Financial) autonomus vehicle unit and retail giant Walmart Inc. (WMT, Financial) are collaborating to test driverless deliveries in Scottsdale, Arizona. The two companies said the Chevrolet Volt, the automaker's battery-powered vehicle, will start delivering groceries beginning next year.
Initially, the autonomous cars will have human backup drivers to observe the car and provide support in the delivery process. However, General Motors Cruise spokesperson Ray Wert said the entire process will eventually be shifted to completely autonomous deliveries.
Walmart's effort to boost retail sales
Walmart is implementing new ways to boost sales and overcome delivery challenges that arose during the pandemic. The company said customers who place orders will have it delivered at their doorstep in a contact-free manner. This is one of the retail giant's several autonomous vehicle pilot projects, which will help it find new ways to augment retail sales.
The company began express delivery in April. The service is now extended to more than 2,800 stores across the U.S., reaching over 65% of American households.
Cruise is not the only company teaming up with Walmart. The big-box retailer is also collaborating with San Francisco-based autonomous vehicle startup Nuro, which uses self-driving technology to deliver groceries to customers. Prior to the Nuro partnership, Walmart partnered with Ford (F, Financial) and Gatik to test autonomous grocery shipments. The company also joined up with a startup named Udelv in 2019 to deliver groceries to customers via autonomous vans in Arizona and launched an in-home delivery service where the delivery person would put the groceries directly in the customer's fridge.
The multinational retail chain also partnered with Waymo, which is the autonomous vehicle unit of Google's parent company, Alphabet (GOOG, Financial)(GOOGL, Financial), earlier this year. The company is also currently testing drone operators, including one operator delivering certain health and wellness products. Walmart's Senior Vice President of Customer Product Tom Ward commented:
"We may be growing delivery options today, but we're still experimenting with new ways we can use technology to serve customers in the future. You've seen us test drive with self-driving cars in the past, and we're continuing to learn a lot about how they can shape the future of retail."
Fight for market share
The pilot project is going to be a major milestone for both General Motors and Walmart. As far as GM's Cruise unit is concerned, the partnership would provide a gateway to enter the profitable delivery services market. For Walmart, it will help the retailer more effectively competing with Amazon (AMZN, Financial), which recently acquired self-driving car startup Zoox.
Summing up
Walmart has been testing various ways to deliver groceries to customers via self-driving technology. The primary aim of the partnership with GM's Cruise unit is to see how autonomous grocery delivery can be used and improved to better serve shoppers.
Disclosure: I do not hold any positions in the stocks mentioned.
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