Walmart is upping its delivery game with the introduction of one-day delivery through the NextDay delivery program. The service already is available in Phoenix and Las Vegas and will enter Southern California this week before expanding to 40 of the top 50 U.S. metro areas, reaching 75% of the population, by the end of 2019.
NextDay is a standalone, curated shopping experience that covers a range of 220,000 frequently purchased products, including diapers, laundry detergent, toys and electronics. The service is available on orders of $35 or more, with no associated membership fee. The specific assortment and cutoff times vary by geographic location.
Walmart’s rollout comes several weeks after Amazon launched its own one-day delivery program, which is available exclusively to Prime members but has no minimum purchase threshold. As part of the changes, the e-Commerce giant plans to invest $800 million during Q2 2019 to improve warehouses and delivery infrastructure.
In contrast, Walmart believes that next-day delivery will reduce its costs, not increase them. The smaller, localized selection available through NextDay means all products will ship in a single box from a single local warehouse, reducing last mile costs. In comparison, standard orders can include items shipped from warehouses across the country, necessitating multiple shipments.
The challenge, and potential major benefit, for Walmart will be winning additional e-Commerce market share from time-conscious customers. The retailer already uses its brick-and-mortar stores to offer grocery pickup, and NextDay could give shoppers another reason to visit Walmart’s web site over Amazon.
“Unlike a few years ago, Walmart is now really flexing its muscles when it comes to e-Commerce, and that’s a good thing for competition and for consumers,” said Neil Saunders, Managing Director at GlobalData Retail in a RetailWire discussion. “Walmart’s store base and strong logistics capabilities give it a potential advantage in fulfillment that means it should be able to offer speedy deliveries at a much lower cost than many rivals. For me, the challenge is less about logistics (where I think Walmart can succeed), it is about persuading more customers to use Walmart as their default e-Commerce site. Customer numbers are growing, but there’s a lot more work to do.”