Walmart is joining the race to make overnight shipping the new standard for e-commerce.
Amazon announced last month its intention to Walmart had hinted that this effort was in the works soon after Amazon’s announcement.to the United States of the two-day shipping to only . Not looking for Amazon to monopolize all the attention, Walmart on Monday unveiled its own plans to deliver one-day shipping.
As Amazon plans to expand its one-day shipping capacity during this year, Walmart immediately began offering it a new “NextDay” benefit, but only in Phoenix and Las Vegas and with a limited inventory of 220. 000 articles. Southern California is coming in a few days. By the end of the year, Walmart expects to reach about 75% of the US population.
There is another very big difference between these competing programs: Amazon’s requires an annual subscription of $ 119, while Walmart’s is free, as long as orders are $ 35 or more.
“We feel good where we are and where we are going”,Walmart’s U.S. ecommerce manager said in an interview. “We expect that, based on the research, customers will really appreciate the upgrade here.”
Walmart’s move could force other retailers to start offering more day-to-day and same-day shipments to keep pace, giving shoppers more choices and faster shipping times. The move could also put more pressure on Amazon and make it more difficult for the company to increase Prime’s annual price.
New one-day shipping program continues Walmart’s aggressive push to become a stronger online competitor to Amazon, after years of seemingly ignoring e-commerce, allowing Amazon to become the juggernaut it is today. ‘hui. Walmart strengthened its online capabilities with the purchase of Jet in 2016 and aLast year. He also added for free two years ago and expanded their grocery pickup and delivery services. It even launched a crowdsourcing operation called Spark Delivery, a rival to Amazon’s similar Flex business.
Now, Walmart’s e-commerce sales are growing faster than Amazon’s, albeit from a much smaller base.
“It’s King Kong vs. Godzilla. These guys are really fighting,” Forrester analyst Sucharita Kodali said.
Amazon, DoorDash, Uber Eats and Postmates, she said, all help raise customer expectations for faster shipping times, making it more likely that one-day shipping will become the norm. However, she doesn’t know if this change will last.
“I wonder if this is sustainable in the long run,” Kodali added. “How profitable will it be for them? “
Walmart says its one-day shipping actually costs it less than two days, as orders come from a single warehouse located close to customers, allowing Walmart to deliver in a single box and using inexpensive ground shipping.
Charlie O’Shea, an analyst at Moody’s, said he expects Walmart to continue to use its more than 5,000 U.S. stores as a big advantage over Amazon to fuel its shipping services and provide same day pickup. In order to narrow this gap, Amazon bought Whole Foods, which has 500 stores, in 2017.
Amazon Tuesday took the opportunity to mock Walmart’s announcement, tweeting that many of its customers already have access to same-day delivery.
One-day inventory at Walmart will focus on the most popular online items, such as diapers, electronics, and laundry detergents, as well as items tailored to each city served, such as sunscreen in Phoenix. . Inventory of up to 220,000 items is still tiny compared to the 75 million items Walmart sells online and far less than the hundreds of millions of items Amazon sells.
A typical cut-off time for getting a one-day shipment will be 3 p.m. local time, but it will vary by location and in some cases will be late evening, Lore said.
“It will be a very practical experience, very predictable, reliable, and we think it is a very important change,” he said.
Originally posted May 13, 9:01 p.m. PT.
Updated May 14 at 8:59 am: Adds comments from Moody’s analysts.