- Walmart plans to roll out one-day shipping to 40 of the top U.S. metropolitan areas over the coming months, the company announced Tuesday.
- Marc Lore, head of Walmart's e-commerce arm, said in a blog post that next day shipping would be available without a membership fee for orders over $35. It includes 220,000 popular items, "ranging from diapers and laundry detergent to toys and electronics," with more to come, Lore added.
- The option will first be available in Phoenix and Las Vegas, and Walmart will add it to southern California in the coming days. Lore said next-day shipping on general merchandise has been in the works "for a while now." The announcement comes not even three weeks after Amazon announced it would speed up its two-day Prime shipping to one day for eligible items.
As it has for much of its existence, Amazon upped the ante for competitors around customer convenience. Amazon Chief Financial Officer Brian Olsavsky said at the time that the change to its Prime delivery time was "all about the core free two-day offer morphing into a free one-day offer."
Analysts at the time described the transition to one-day shipping as necessary for Amazon to once again differentiate itself, after rivals in general merchandising (namely Walmart and Target), as well as much of the retail world, have caught up to the free two-day shipping model following years of expensive investment, acquisitions and operational changes.
Moody's analyst Charlie O'Shea described Walmart's one-day shipping option as "the latest salvo in the ongoing delivery arms race initiated and recently escalated by Amazon."
The retail giant has been working its way toward faster delivery. In 2011, it began offering two-day shipping without a delivery fee — a shot, in part, at Amazon's Prime membership, which now runs at $119 per year. Lore said in his post that Walmart is also on track to offer grocery pickup and same-day delivery at 1,600 stores across the U.S. by the end of the year. One-day shipping on general merchandise offers a complement to that offer.
Lore said that next-day shipping costs Walmart less, rather than more, as the eligible items come from a single fulfillment center closest to the customer, meaning they ship in one box, or as few as possible, and cover less ground.
O'Shea pointed to Walmart's store base as critical to its convenience and delivery propositions. "In addition to providing consumers with same-day availability via in-store pick up of online orders, these stores augment a world-class proprietary distribution network as they are also potential shipping points," he said in comments emailed to Retail Dive.
Wells Fargo analysts led by Edward Kelly said in a note Tuesday that Walmart's one-day shipping "helps to alleviate some concern around the impact of Amazon's recent move and is a step forward in defending share." The key questions going forward, they noted, are the number of available products and the "consistency of delivering on the shipping promise." Nor is the delivery battle likely to stop here. The analysts said that Amazon's likely goal is same-day delivery for Prime members.
"The news is negative for most other competing retailers, as it once again highlights the challenges of competing with deep-pocketed players in the evolving digital landscape," they added.