Amazon put the retail world on notice when it announced plans to evolve its core Prime shipping time from two days to one. Three weeks later, Walmart has responded.
On Monday, Walmart unveiled NextDay, a new initiative to offer more than 220,000 popular items for one-day delivery with a minimum order threshold of $35. Walmart is starting the program off in Las Vegas and Phoenix, with Southern California next up for expansion. Walmart plans to roll the program out gradually over the coming months and reach roughly 75 percent of the U.S. population this year, including 40 of the top 50 U.S. cities.
RELATED: Everything you need to know about Amazon’s push to make one-day shipping the new standard for Prime
Walmart e-commerce chief Marc Lore, who came over via the acquisition of Jet.com in 2016, wrote in a blog post that Walmart has been working on the plan for awhile. The timing is interesting as it comes less than three weeks after Amazon said it would spend $800 million in the second quarter alone to make one-day delivery the standard for its Prime fast-shipping program.
Lore wrote that Walmart is able to pull off this bold shipping initiative because of its network of warehouses throughout the country. Walmart has spent time tracking purchases so the company has the right items in the right warehouses to deliver orders efficiently. Lore argues that these factors mean the shift to faster delivery won’t lead to a major increase in shipping costs.
“Contrary to what you might think, it will cost us less – not more – to deliver orders the next day,” Lore wrote. “That’s because eligible items come from a single fulfillment center located closest to the customer. This means the order ships in one box, or as few as possible, and it travels a shorter distance via inexpensive ground shipping. That’s in contrast to online orders that come in multiple boxes from multiple locations, which can be quite costly.”
Lore pointed to the development of Walmart’s two-day shipping and one-day grocery delivery programs as key to the development of NextDay. Walmart is on track to offer Grocery Pickup from 3,100 stores and same-day Grocery Delivery from 1,600 stores by the end of the year, which would cover approximately 80 percent and 50 percent of the U.S. population, respectively.