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Walmart expands its direct-to-fridge InHome delivery service to 30 million homes

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Walmart is making a big bet on customers’ desire for increased convenience, announcing Wednesday that its InHome delivery service will expand availability from six million to 30 million households, including in cities such as in Los Angeles and Chicago, by the end of this year.

InHome allows Walmart employees wearing cameras to enter a customer’s home to deliver groceries and other purchases or to pick up returns, even when the customer is not there.

“Now you’ve got this ultimate convenience where you get home, the refrigerator is restocked and other items like video games, clothing, toiletries and other non-perishables are on the countertop,” Tom Ward, senior vice president of last mile delivery at Walmart, told CNBC. “We will also pick up your return if you start that process on the app we will grab the item the next day and will process that return for you.”

The process began with the delivery driver attaching a wearable camera. Every delivery can be viewed live or as a recording on the Walmart App. The employee outfitted in protective coverings over their shoes then accessed a smart lock from Walmart at the front door to enter the home and carried the ordered items inside in plastic bins. The delivery person placed items in the refrigerator and on the counter as requested and wiped down all surfaces with a sanitizing wipe before leaving.

“I’ve used it for the last month and a half and have been very satisfied,” Erin Amini, a customer in Glendale told CNBC. “We no longer have to go to the store. We feel safe with Covid. They wear masks, they sanitize and they are also always recording so we know what is happening while they are in our home.

Walmart is expanding InHome as the lines are blurring between what Insider Intelligence estimates as a $93 billion grocery delivery market and what Coresight Research pegs as up to a $25 billion quick-commerce market, which includes the likes of DoorDash. Walmart’s InHome service costs $19.95 per month with no additional fees, and it’s part of a growing trend of “delivery as a service.”

Walmart said it will hire 3,000 employees to support its InHome expansion, giving them real world and virtual reality training. They will be paid approximately 9% more than Walmart’s average wage of $16.40 an hour. Walmart’s 3,700 stores will be used as fulfillment centers and InHome delivery drivers will drive electric vehicles as part of the company’s goal of a zero emissions logistics fleet by 2040.

“They’ll also deliver Walmart packages, they’ll deliver Walmart GoLocal client packages, and they’ll do InHome delivery. It’s making the best of all these assets that we’re putting together in a way that’s really sustainable,” Ward said.

Walmart initially launched InHome in 2019 as a pilot in Kansas City, Pittsburgh and Vero Beach, Fla., and it’s since expanded in Northwest Arkansas, Atlanta, Phoenix and Washington, D.C. The company declined to say how many customers the service now has.

“What we’ve learned in the years we’ve been testing our InHome proposition is that customers love the convenience of having the items that they’ve ordered put in their fridge, their freezer, or left on their countertop, or in the garage when they come home. And they can just set and forget and really do the things they want to spend their time doing,” Ward added.

Currently the nation’s largest grocer by revenue, Walmart has used that frequency-driving category to fuel online sales growth by launching convenient ways for people to shop and encouraging customers to buy other items, such as apparel, electronics and more, when replenishing the fridge with a gallon of milk or getting ingredients for dinner.

The big-box retailer is also the nation’s leader in click and collect, a service that allows shoppers to place online orders and pick up purchases in the store or parking lot. One in every four dollars that Americans spent on click and collect in 2021 went to Walmart, according to a recent estimate by Insider Intelligence.

“We think there is no one right answer in the last mile equation,” Ward said. “We want to experiment and then when we see those things that really resonate with our customers we want to scale out to as many people as we possibly can as fast as we can.”

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BUSINESS

Bitcoin set for worst quarterly drop in a decade

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Bitcoin is on track for its worst quarter in more than a decade, as more hawkish central banks and a string of high-profile crypto blowups hammer sentiment.

The 56% drawdown in the biggest cryptocurrency is the largest since the third quarter of 2011, when Bitcoin was still in its infancy, data compiled by Bloomberg show.

The decade in between those hallmarks saw several booms and busts, with cryptocurrencies’ market value swelling as they gained more widespread adoption and ultra-low interest rates spurred risk taking. But the current bear market stands out for the amount of crypto leverage that’s been unwound — and for the regulatory scrutiny being heaped on an asset class many central banks now consider a threat to financial stability.

Bitcoin slipped 1% to trade just below the $20,000 level on Thursday morning in London. Several altcoins did worse, with Solana and Polygon falling around 6%.

The drumbeat of bad news adds up to a stinging rebuke of the crypto ethos of unbridled speculation and free-wheeling innovation: A token that was supposed to be pegged to the US dollar collapsed, almost instantly erasing roughly $40 billion of market value. Several crypto lenders were forced to halt withdrawals, leaving depositors in the lurch. And most recently, a prominent crypto hedge fund was ordered into liquidation after running up unsustainable leverage to fuel its bets.

For all the gloom, some analysts are pointing to signs that the bottom may be near. The deleveraging that accelerated the rout in past months may not have much further to run, JPMorgan Chase & Co. strategists including Nikolaos Panigirtzoglou said in a note published Wednesday. They also pointed to venture capital funding that “continued at a healthy pace in May and June.”

“Bitcoin has had good success over the last dozen years at making cyclical lows every 90 weeks,” Fundstrat technical strategist Mark Newton said. “Lows should be right around the corner according to this cycle composite, and one should be on alert in the month of July, looking to buy weakness for a healthy rebound, just as sentiment seems to be reaching a bearish tipping point.”

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Here’s what’s hot — and what’s not — in fintech right now

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Financial technology is the hottest area of investment for venture capitalists — $1 out of every $5 of funding flowed into fintech startups in 2021.

But with a recession possibly around the corner, investors are writing fewer — and smaller — checks. And they’re getting much more selective about the kind of companies they want to back.

According to CB Insights, global venture investment in fintech firms sank 18% in the first quarter of 2022.

That’s led to something of a rotation out of certain pockets of fintech that were hyped by venture capitalists last year, such as crypto and “buy now, pay later,” and into less sexy areas focused on generating stable streams of income, like digitizing payment processing for businesses.

So what’s hot in fintech right now? And what’s not? I went to the Money 20/20 Europe event in Amsterdam in June to speak to some of the region’s top startup investors, entrepreneurs and analysts. Here’s what they had to say.

What’s hot?
Investors are still obsessed with the idea of making and accepting payments less onerous for businesses and consumers. Stripe may be facing a few questions over its eyewatering $95 billion valuation. But that hasn’t stopped VCs from looking for the next winners in the digital payments space.

“I think we’ll see a next generation of fintechs emerge,” said Ricardo Schafer, partner at German venture capital firm Target Global. “It’s a lot easier to build stuff.”

Niche industry buzzwords like “open banking,” “banking-as-a-service” and “embedded finance” are now in vogue, with a slew of new fintech firms hoping to eat away at the volumes of incumbent players.

Open banking makes it easier for firms that aren’t licensed lenders to develop financial services by linking directly to people’s bank accounts. Something that’s caught the eye of investors is the use of this technology for facilitating payments. It’s an especially hot area right now, with several startups hoping to disrupt credit cards which charge merchants hefty fees.

Companies like Visa, Mastercard and even Apple are paying close attention to the trend. Visa acquired Sweden’s Tink for more than $2 billion, while Apple snapped up Credit Kudos, a company that relies on consumers’ banking information to help with underwriting loans, to drive its expansion into “buy now, pay later” loans.

“Open banking in general has gone from a big buzz word to being seamlessly integrated in processes that nobody really cares about anymore, like bill payments or top-ups,” said Daniel Kjellen, CEO of Tink.

Kjellen said Tink is now so popular in its home market of Sweden that it’s being used by about 60% of the adult population each month. “This is a serious number,” he says.

Embedded finance is all about integrating financial services products into companies that have nothing to do with finance. Imagine Disney offering its own bank accounts which you could use online or at its theme parks. But all the work that goes into making that happen would be handled by third-party firms whose names you might never encounter.

Banking-as-a-service is a part of this trend. It lets companies outside of the traditional world of finance piggyback on a regulated institution to offer their own payment cards, loans and digital wallets.

“You can either start building the tech yourself and start applying for licenses yourself, which is going to take years and probably tens of millions in funding, or you can find a partner,” said Iana Dimitrova, CEO of OpenPayd.

What’s not?
Got an idea for a new crypto exchange you’re just dying to pitch? Or think you might be onto the next Klarna? You might have a tougher time raising funds.

“The tokenization and the coin side of things we want to stay away from right now,” said Farhan Lalji, managing director at fintech-focused venture fund Anthemis Capital.

However, the infrastructure supporting crypto — whether it’s software analyzing data on the blockchain or keeping digital assets safe from hacks — is a trend he thinks will stand the test of time.

“Infrastructure doesn’t depend on one particular currency going up or down,” he said.

Investors see more potential in companies making it easier for people to access digital assets without all the knowhow of someone who trades cryptocurrencies and nonfungible tokens every day — part of a broader trend called “Web3.”

When it comes to crypto, “the areas that most interest us today are areas that we have an analogue experience to in classic industries,” said Rana Yared, a partner at venture capital firm Balderton.

As for BNPL, there’s been something of a shift in the business models VCs are gravitating toward. While the likes of Klarna and Affirm have seen their valuations plummet, BNPL startups focused on settling transactions between businesses are gaining a lot of traction.

“Growth in B2C [business-to-consumer] BNPL is slowing … and regulatory concerns could curtail growth,” said Philip Benton, fintech analyst at market research firm Omdia.

Business-to-business BNPL, on the other hand, is “starting from a very low base” and therefore has “huge” potential, he added.

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Treasury yields nudge lower as market participants track economic data, auctions

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U.S. Treasury yields nudged lower on Thursday as investors continue to assess the prospect of a recession.

The yield on the benchmark 10-year Treasury note was marginally lower to trade at 3.0612%, while the yield on the 30-year Treasury bond slipped to 3.1989%. Yields move inversely to prices.

As the second quarter draws to a close on Thursday, concern over a slowing economy and aggressive interest rate hikes from the Federal Reserve continue to dominate market sentiment.

Fed Chairman Jerome Powell on Wednesday said that policymakers would not allow inflation to take hold of the U.S. economy over the longer term.

Speaking at a European Central Bank forum, Powell said it’s important to arrest long-term inflation expectations so that they don’t become entrenched and create a self-fulfilling cycle.

“We’re strongly committed to using our tools to get inflation to come down. The way to do that is to slow down growth, ideally keeping it positive,” he said. “Is there a risk that would go too far? Certainly, there’s a risk. I wouldn’t agree that it’s the biggest risk to the economy. The bigger mistake to make … would be to fail to restore price stability.”

Market participants on Thursday will monitor a fresh batch of economic data. Initial jobless claims for the week ending June 18, personal income figures for May and consumer spending data for May will be released at 8:30 a.m. ET.

The core personal consumption expenditures price index — the Fed’s preferred inflation gauge — will be released at the same time, while the Chicago Purchasing Managers’ Index for June is scheduled to be published at 9:45 a.m. ET.

The Treasury will auction $35 billion in 4-week bills and $30 billion in 8-week bills on Thursday.

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