Reuters - Video

EDITION: U.S. | U.K. | IN

Business

Wal-Mart's customers as delivery team? S&P's Gordon is leery

Thursday, Mar 28, 2013 - 03:38

March 28 - S&P Capital IQ's Ian Gordon gives Wal-Mart credit for thinking outside the box- but here are many of issues with the business model, and getting customers to buy in to the idea. Bobbi Rebell reports.

▲ Hide Transcript

View Transcript

Writers explicitly reported that Wal-Mart is considering getting it insert customers to deliver packages to its online buyers. As handicap like he is in -- is here to talk more about this idea which. At first glance seems pretty far -- -- you get the credit though for thinking outside the box. Guide viewers I think they need to be creative there clearly threats from all different directions and on line and fast delivery is one of them so you know anything that they do to trying to think of something that can give them an edge I think it's a positive. Without actually work as a business. Yeah I I mean I think there are a lot of potential issues that witness -- this type of model and you know the question is really aren't they. Trying to make a profit doing it or is this just the way for them to lower their costs. Delivery. And to be a little bit more competitive. -- e-commerce efforts and the direction that they wanna take the company. Yeah I mean they've been invests in pretty heavily in globally commerce they've established and office on the West Coast. Made a lot of -- so I think this is probably the one in the early outcomes. Of some of those investments and it's really just reflective of people out there been a little bit more creative maybe. Having hired some more creative minds to think of things. That are a little bit different. But this is still Wal-Mart and there are a lot of hurdles out there what were you when you think that's -- Yeah I'm not I agree like you said I think there are a number of hurdles. It's. You know we could start with the with the legal framework. And liability for example in -- -- expert on this but. He's -- you think of somebody gets hit -- pizza delivery man and it's one thing to go after. The pizza parlor but another you know when that person was. Hired some sort of fashion by Wal-Mart so I think that's you know one example. One obstacles these things. And how likely -- customers to really do this for what Wal-Mart tells Reuters is basically going to be discount that would cover their gas -- me that doesn't sound like -- huge incentive. Yeah I think they're gonna. Have to work a little bit more on really what the incentive is. For customers. You know the gas bill and on a single trip like this is is miniscule so there's gonna have to be some other reason. And what about security -- -- -- -- my customers really want strangers coming up to our house to drop off stuff. Yeah I know. I would be -- and and there's certainly potential for for abuse in this time from also I think. They're gonna have to be you have a pretty heavy compliance organization. -- in placed to make sure that they're using the right people. To do this and and we've learned anything -- over the past year following Wal-Mart is that compliance costs money. And Wal-Mart tells mortars and this is just in the brainstorming phase to be fair but what's your back this ever really happened how realistic is this. Is this a business model that would work. Yes certainly I wouldn't expect to see this widespread and say the next two or three years. Beyond that. I would say I'm I'm skeptical that ultimately they'll be able to sort out. All of them the the potential pitfalls that -- this type of model but you know again give them credit -- for thinking in and trying things out and you know who knows maybe I'll be surprised -- right we'll leave it there thank you so much yet. I thanked Q as handicap like youth in guard and I about your about this is Reuters.

Wal-Mart's customers as delivery team? S&P's Gordon is leery

Thursday, Mar 28, 2013 - 03:38

Top News »

The Exchange »

Moving Pictures »