Why Walmart is moving in on DoorDash, Uber Eats delivery action

Walmart will soon be able to bring you an iced coffee and a maple doughnut — from Dunkin’. 

The nation’s largest retailer announced this week it will first start delivering Dunkin’ products from its own stores, but will then expand the program over the next year to include most of the doughnut chain’s approximately 10,000 U.S. locations, most located outside Walmart stores entirely. This outside-the-store experiment builds upon the retailer’s similar delivery program with in-store Subway restaurants. 

Industry experts say this amounts to Walmart throwing down the gauntlet at rival food delivery services like Uber Eats and DoorDash. For its part, Walmart is billing it as a natural extension of what it is already doing. 

“We see this as a way to continue adding value and convenience for customers within a shopping experience they already know and trust. By pairing restaurant delivery with Walmart’s vast assortment, we can create a delivery experience that gives customers more of what they want in one place,” a Walmart spokesperson told CNBC. 

In other words, while you are ordering your iced latte or cinnamon cruller, add toilet paper, mouthwash and socks to your order. That, says Hongseok Jang, an assistant professor of management science at Tulane University, is the point. Jang has studied online delivery and said Walmart’s vast reservoir of built-in customers, its stores, and existing logistics network will make it a formidable competitor to other food delivery companies. 

The Walmart spokesperson said the Dunkin’ deliveries will run through its new service called Walmart Restaurant Delivery, for which Subway was the first partner.

“To me it seems that Walmart is testing its own delivery system to see if they can handle it, and if it is successful there will be a big competition between Walmart and Uber Eats and DoorDash,” Jang said.

Walmart’s Dunkin’ announcement suggested as much, with the retailer referring to itself as a “rapidly emerging contender in the restaurant delivery business.” 

Mike Danford, co-owner and chief strategy officer at Adverio, an e-commerce marketing agency that works with brands selling on Amazon, Walmart, and Target, said Walmart’s shift to delivering items from outside Walmart, such as a Dunkin’ store, is a big change. 

“Delivering from a restaurant inside your own building isn’t restaurant-only delivery. It’s simply adding one more item to shopping carts off your own shelf, and the Spark driver was already there staging a grocery order,” Danford said, referring to the company’s Spark Driver platform which allows independent contractors to source gig delivery work.

But “phase two,” Danford says, when Walmart starts delivering from shops outside its store footprint, is another story. “Once you leave your own building, the attachment breaks, and you’re…