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Walmart has been trying to break into the New York City market for years. Now, they’re making headway—not with a store, but by zeroing in on the hectic city delivery scene with its latest acquisition, a small Brooklyn-based startup called Parcel.
The idea is for Parcel to help Walmart with the most expensive final stretch of its same-day and scheduled shipping throughout the city. The so-called “last mile” of the online shopping delivery process tends to be by far the costliest and most cumbersome stage of a package’s journey. That goes even more so for a densely populated metro area like New York, the top market for Walmart’s website and its Jet.com subsidiary but also one of the toughest to navigate.
That’s where Parcel comes in. The company’s built a proprietary database of routes and information on every NYC building to which it’s delivered, down to minute details (like, say, the most convenient entrances).
“The traffic in a place like New York City tends to be a pretty big obstacle that we’ve done an amazing job of optimizing for,” Parcel CEO and founder Jesse Kaplan said. “It’s an area where consumers have the highest expectations—perhaps even unreasonably so.”
Parcel will work with both Walmart and Jet and cover general merchandise as well as groceries. The startup already boasts partnerships with several meal kit services and other e-commerce brands, and a Walmart spokesperson says those contracts will continue under its ownership.
The deal comes as Walmart’s been looking to streamline its shipping operation to compete with Amazon’s hyper-convenient service. Big city customers have come to expect the option of same-day delivery—especially when it comes to perishables like groceries.
It also follows a string of e-commerce acquisitions on Walmart’s part that started with its $3 billion purchase of Jet.com last year and included trendy brands like Bonobos and ModCloth.
Both sides declined to reveal the terms of the deal, but Recode reported that Parcel’s price was less than $10 million.