Home Depot hires Walmart to help with same-day deliveries

Walmart Inc has landed a massive first client for its new GoLocal fast delivery service for other retailers: do-it-yourself retailer Home Depot.

The arrangement announced on Tuesday, will focus on same-day and next-day delivery and start at select stores in New Mexico, Texas, and Arkansas in the next few weeks, before expanding to other markets by year-end. The items Walmart will deliver for Home Depot will be smaller items that can fit into a car, like tools, paint and other supplies.

“This partnership brings us even closer to our goal of offering same-day or next-day delivery to 90 percent of the U.S. Population,” Stephanie Smith, Home Depot senior vice president of supply chain, said in a statement.

Walmart announced the launch of GoLocal in August as a new source of revenue it could generate as a byproduct of its e-commerce infrastructure and massive network of stores across the U.S. (Ninety percent of Americans live within 10 miles of one of its 4,700 stores.) Walmart’s delivery muscle rivals that of Amazon and last-mile delivery firms such as DoorDash and Uber. Winning Home Depot, the No. 4 U.S. Retailer, will provide Walmart with proof points to further expand the business if things go well.

The Home Depot partnership follows other recent efforts by Walmart to enter high growth areas such as launching a large advertising business, opening health clinics, and financial tech. Walmart also provides technology and services to other companies wanted to improve their e-commerce under their Walmart Connect and Walmart Fulfillment Services programs.

For Home Depot, it’s a way to expand its quick delivery. The home improvement chain has its own e-commerce firepower, with online sales almost doubling last year, and it is investing $1.2 billion on its supply chain. Walmart, with which it doesn’t compete all that much, can help it with fast delivery of smaller items.

While such a partnership between retailers might seem counterintuitive, many chains are being pragmatic about what they can do themselves and opting to work with competitors in moves once seen as unthinkable. To name but two recent examples, Gap recently started selling a home goods line on Walmart’s website, while Ulta Beauty has opened shops within Target, with which it competes in the beauty arena at countless U.S. Shopping centers.