Walmart next-day delivery will be free, taking aim at Amazon

16 Mai, 2019, 12:56 | Auteur: Auguste Feret
  • Walmart next-day delivery will be free, taking aim at Amazon

Although Walmart says it will be less expensive to ship online orders the next day, CNBC reports that UBS analysts estimate the discounter will need to spend $215 million in incremental investments to match Amazon's one-day shipping capabilities.

Walmart's offer applies to fewer products.

The free NextDay delivery offers 220,000 frequently-purchased items like diapers, laundry detergent, electronics and toys. It is available on eligible orders of $35 or more, with the specific assortment varying by customer location. The company said it plans to roll out the service gradually over the coming months, with a plan to reach about 75 percent of the US population this year.

"Contrary to what you might think, it will cost us less - not more - to deliver orders the next day", Lore wrote. Target already offers free one-day shipping, but only to members of its REDcard loyalty program, which does not carry an annual fee.

Amazon on Monday announced the expansion of its delivery service partner program across the United States with an incentive for current Amazon employees to start up a small business venture owning and operating their own package delivery company The chain is awarding those selected with $10,000 to start up the business, as well as the equivalent of three months of the former employee's last gross salary.

Fulfillment centers are the key for Walmart and Amazon. That's almost double the number of items it carries in its stores.

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The vast majority of the order volume for such a service comes from the "first couple of hundred thousand" products, he said.

Membership will not be required, Mark Lore, president and CEO of Walmart eCommerce U.S., said in a memo posted at its website.

"It is counter-intuitive. but the way we have structured our network, we will see improved profitability as a result of lower shipping cost", he said. Customers simply have to make sure all the items in their cart are from the curated list to be able to quality for next-day shipping.

"The bottom line is that these costs are pretty manageable", the note says.

He also said the recently implemented tariffs on Chinese imports will not hurt demand as most are best-sellers and popular items that shoppers will keep buying even if prices rise.

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