Walmart is expanding its next-day delivery to more areas of the U.S. as it pushes back on Amazon’s one-day delivery expansion plans.
According to a report in The Wall Street Journal citing Marc Lore, head of U.S. eCommerce at Walmart, the retailer will start offering free next-day shipping this week for around 200,000 products for customers living in Phoneix, Las Vegas, and Southern California. The paper noted more areas will get the free one-day shipping during 2019. Customers have to place orders of $35 or more. Orders are shipped in one box to address complaints from customers about receiving multiple boxes.
Lore told The Wall Street Journal that customers will only be able to choose next-day shipping if the product is in a warehouse that enables it to be shipped via ground. As a result, Lore said, there is no “incremental investment we need to do to do next-day.”
Lore told the Wall Street Journal that embracing a one-day delivery model lowers the cost per delivery. Shoppers can only buy items from warehouses close to their homes, and with the items arriving together, it reduces the costs. The move comes on the heels of Amazon announcing earlier in May that next-day shipping will become the standard for Prime orders.
As it stands, customers get free two-day shipping as part of their Prime membership. Amazon’s success has been credited to its speedy, free shipping. The paper noted Walmart is also expanding its online grocery pickup and delivery to additional locations.
The next-day delivery is also aimed at boosting Walmart’s eCommerce sales. While still small, it is fast-growing, with eCommerce sales in the U.S. increasing 40 percent in the fiscal year ended Jan. 31. The retailer has predicted online sales in the U.S. to grow about 35 percent in 2019, noted the report.