Walmart Inc. today will make good on a tweet it floated President Trump-style last month after competitor Amazon revealed it would launch free next-day delivery for members of its Prime service. “One-day free shipping…without a membership fee. Now, THAT would be groundbreaking. Stay tuned,” the world’s largest retailer tweeted, in a thinly veiled reference to Amazon’s $119 annual Prime fee.
Bentonville, Ark.-based Walmart is beginning to roll out NextDay free delivery, without a membership fee, for orders over $35 on walmart.com. The offer is initially available to Walmart consumers in Phoenix and Las Vegas. Following that, it will expand to Southern California in the coming months, then gradually roll out to about 75 percent of the U.S. population, including 40 to 50 major metropolitan areas, by year’s end, the retailer said.
With shoppers demanding increasingly fast, flexible, low-cost or no-cost options, delivery has become a key battleground in the fight for customers. When Amazon said it would launch next-day delivery, retail pundits called the move “a game changer.” But Walmart was able to quickly ramp up its capabilities, partly due to the fact that it’s pressed its store fleet into service to fulfill online orders.
Amazon generally lacks a large-scale brick-and-mortar infrastructure — Walmart and Target operate 4,769, and 1,851 stores, respectively — and has had to experiment with last mile delivery solutions. The online giant told Wall Street analysts in April that it would invest $800 million to ensure its Prime loyalists received their packages a day after placing an order.
Marc Lore, president and chief executive officer of Walmart U.S. e-commerce, said customers “expect to find great items at low prices and also want shopping to be easy and convenient, including getting the items they order online quickly. Our 4,700 stores, web site and app combine to create an incredible range of choices for customers.
“Walmart’s NextDay delivery offers a stand-alone, curated shopping experience where customers can browse up to 220,000 most-frequently purchased items, ranging from diapers and laundry detergent to toys and electronics, and more assortment to be added, available on eligible orders over $35 with the specific assortment varying by customer location.”
To use the service, customers visit walmart.com and toggle to the NextDay delivery experience to view items that are eligible for free delivery. After adding items to a cart, the customer proceeds to checkout. Everything in the cart must be eligible for NextDay delivery in order to qualify, and cut-off times vary by location.
Lore pointed out that Walmart is able to offer a range of shipping options with its “network of fulfillment assets strategically located across the U.S. We’ve also done extensive work to ensure we have the right products at the right fulfillment center based on where consumers are located and what they’re ordering.”
NextDay delivery complements Walmart’s same-day grocery pickup and delivery options, and free two-day shipping, available for millions of items. “With the combination of these choices, we’re making every day easier for busy families,” Lore said, adding that 90 percent of Americans live within 10 miles of a Walmart store.
Anticipating Wall Street’s reaction to the investment in next-day delivery, Lore said the service “isn’t just great for customers, it also makes good business sense. Contrary to what you might think, it will cost us less — not more — to deliver orders the next day. That’s because eligible items come from a single fulfillment center located closest to the customer. This means the order ships in one box, or as few as possible, and travels a shorter distance via inexpensive ground shipping. That’s in contrast to online orders, which come in multiple boxes from multiple locations and can be quite costly.”
Retail experts said next-day delivery will soon be obsolete, replaced by same-day delivery, which will become the standard. Walmart has acquired last mile logistics start-up Parcel, while Target purchased same-day grocery delivery service Shipt, and both retailers are no doubt putting them to the test.