Walmart has announced it’s rolling out free next day delivery on its most popular items in select geographical areas.
What’s in it?
Orders over $35 will be eligible for free next-day delivery, without the need to pay a membership fee. The offer will be initially available to customers based in Phoenix and Las Vegas, before expanding to customers based in Southern California over the next few days. The next-day service will cover 220,000 popular items from diapers and non-perishable food items to toys and electronics. The order cut-off times will differ from one location to another, and orders will be delivered mainly by national carriers, and in some cases, regional carriers.
Walmart aims to reach 75% of the US population by the end of the year. It also intends to add hundreds of thousands of products as the service expands.
Reaction to Amazon’s free one-day shipping for Prime members
Walmart’s announcement comes two weeks after Amazon has announced it’ll be investing $800 million in its warehouses and delivery infrastructure to upgrade its free shipping option to its Prime members to one-day delivery instead of two-day delivery.
Walmart has made substantial investments in order to reduce fulfilment lead times. Back in 2017, it has announced free, two-day shipping on more than 2 million items without the need for membership, as long as orders are over $35. Also, back in 2015, it has trialled ShippingPass, which offered three-day shipping on 1 million items, and was considered as an answer to Amazon’s Prime back in the day.
President and CEO of Walmart E-commerce, Marc Lore said: “We can offer fast, convenient shipping options because we’ve built a network of fulfillment assets that are strategically located across the U.S. We’ve also done extensive work to ensure we have the right products in the right fulfillment centers based on where customers are located and what they’re ordering.”
Reduced fulfilment costs
According to Marc Lore, the newly implemented next-day delivery service will cost cheaper than the two-day service, because eligible items will come from a single fulfilment centre located closest to the customer, which means orders will ship in a single box, or in as few as possible, as opposed to two-day deliveries which come in multiple boxes from multiple locations. In addition, Walmart is trying to reduce costs by optimising its range based on customers’ needs in a particular market. As an example, sunscreens would be available all year round for areas like Southern California or Phoenix, Arizona.
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