RSS
Is Walmart's same-day delivery service a threat to Amazon?
The country's largest brick-and-mortar retailer is trying to beat Amazon at its own game
 
Amazon used to have the market cornered on the instant gratification cherished by online shoppers, but now Walmart's competing head-to-head, at least in the holiday season.
Amazon used to have the market cornered on the instant gratification cherished by online shoppers, but now Walmart's competing head-to-head, at least in the holiday season.
CC BY: brendan-c

This week, Walmart rolled out Walmart To Go, a same-day delivery service for online orders that will be offered throughout the holiday season. The service, which will tack on $10 per order regardless of size, is already available in Philadelphia and northern Virginia, and will soon spread to Minneapolis, San Jose, and San Francisco. Capitalizing on customers' increased preference for ordering merchandise online, the move is meant to send shivers down the spine of Amazon, which has been almost frighteningly successful in pushing traditional brick-and-mortar retailers toward the brink of failure. Amazon's own same-day delivery service, introduced in 2009, currently operates in 10 U.S. markets. So should Amazon be worried?

Walmart has one significant advantage: Walmart's program "highlights the key advantage enjoyed by the world's biggest retailer in the race to get customers what they want, when they want it: Location, location, location," says Marcus Wholsen at Wired. Instead of relying on a handful of distribution centers, as Amazon does, Walmart has nearly 4,000 stores across the country that can deliver goods. "Proximity of goods to customers is essential to shortening delivery waits," says Wholsen. "Turns out one of the most promising ways to succeed at e-commerce might be to have a real store after all."
"Walmart wishes Amazon unhappy holidays with same-day delivery"

And this could change the way people shop at Walmart: Amazon should definitely be concerned if Walmart becomes synonymous with same-day delivery. "The first retailer to master same-day delivery on a wide scale could attract customers who have avoided online purchases because they wanted items immediately," says Stephanie Clifford at The New York Times, "and encourage current shoppers to add products that they usually buy from supermarkets or drugstores, including celery and toothpaste."
"Walmart tests same-day delivery"

But Amazon still has a leaner operation: Analysts are still skeptical that Walmart can pull it off. "Shipping from stores, rather than warehouses as Amazon does, is expensive," says Shelly Banjo at The Wall Street Journal. Analysts say it could be four times more expensive for a retailer to locate and ship merchandise, compared to a distribution center with a streamlined, automated process.
"Walmart delivery service says to Amazon: 'Bring it'"

 

THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER

Subscribe to the Week