Walmart (WMT) took another step in challenging rival Amazon.com (AMZN) on retail delivery by rolling out plans to offer free next-day shipping on a range of general merchandise purchased online, with an intention to reach three-quarters of the US population this year.
The no-membership fee offering will be first available to Walmart.com customers in Phoenix and Las Vegas before expanding to southern California and gradually to 40 of the 50 top major US metro areas, or about 75% of Americans, the company said on Tuesday.
“We can offer fast, convenient shipping options because we’ve built a network of fulfillment assets that are strategically located across the US,” said Marc Lore, president and chief executive of Walmart eCommerce US.
The service will be available on up to 220,000 items that Walmart said are most frequently purchased, from laundry detergent to toys and electronics. The specific assortment will vary by location, as will cut-off times for next-day delivery. Orders need to be worth at least $35.
While Lore said Walmart has been working on the service for “for a while,” it comes less than a month after Amazon said it’s making one-day shipping the standard for Prime members, which sent shares of Walmart and fellow retailer Target (TGT) lower at the time.
“We’ve in the past months significantly expanded our one-day eligible selection and also expanded the number of zip codes eligible for one-day shipping,” Amazon’s chief financial officer, Brian Olsavsky, said on an April 25 call with analysts.
Walmart’s Lore said one-day shipping “makes good business sense” because items will come from a single center and orders will ship in as few boxes as possible and travel a shorter distance.
“With 90% of Americans living within 10 miles of a Walmart store, we’re well positioned to offer even faster delivery to customers in the future,” Lore said. The retailer began offering two-day shipping for free two years ago, and same-day in-store pickup in 2011.
Lore also said Walmart is “on track” to offer grocery pickup from 3,100 stores and same-day grocery delivery from 1,600 stores by the end of the year. Grocery pickup will cover about 80% of the US population and delivery will be available to about half of Americans.