In a bid to one-up Amazon.com Inc. in the fight for online shoppers, Walmart Inc. has started rolling out a next-day delivery service to speed shipment times for top customers to just one day from two.
Starting Tuesday, Walmart customers in Phoenix and Las Vegas who buy more than $35 worth of goods will get free one-day shipping. The offer, which Walmart had hinted was in the works and will be applied to as many as 220,000 items, will extend to Southern California in the coming days and will reach about three-quarters of the U.S. by the end of the year.
Unlike Amazon, which will spend $800 million this quarter to reduce delivery times, Walmart said its shift will actually cost the company less, since the items will typically come in just one box from a single warehouse that’s closest to the customer. Keeping a tight lid on expenses is paramount for Walmart, whose domestic e-commerce business isn’t profitable. The operation is forecast to lose more this year than it did in 2018.
“Anytime someone shops next day, it is guaranteed to cost us a lot less to ship,” Marc Lore, Walmart’s U.S. e-commerce chief, said in an interview. “We are not paying the carriers any more. That’s in contrast to online orders that come in multiple boxes from multiple locations, which can be quite costly.”
Lore declined to say whether the expected savings could help the online business get out of the red faster. Walmart is scheduled to report first-quarter results Thursday.
Samson Oyedeyi
