If Walmart's same-day shipping experiment goes well, the discount retailer could be the go-to place for shoppers' immediate online purchasing needs across the country. For this holiday season, Walmart will send Internet-purchased items to you the very same day as online check-out, in 5 select cities. They charge a $10 flat rate fee, require items be purchased before noon that day, and will not include shoes or clothing. Amazon already offers that same quick delivery time in 10 cities, is set to expand by building more warehouses around the country, and potentially costs the same—but possibly more—at $8.99 per order and an extra $.99 per item. For now, Walmart is calling this a "holiday test." If Walmart decides this method works for them, they have 4,000 stores already primed for this delivery option, while Amazon has only 40 warehouse distribution centers. That means Walmart could offer same-day delivery to a lot more people in far more obscure places.
There's also a chance this experiment will not go well, analysts tell both The Wall Street Journal's Shelly Banjo and The New York Times's Stephanie Clifford. "It can be three to four times the cost for the retailer to pick items and pack them from a store versus having a really efficient, automated process back in a distribution center," Al Sambar, a retail strategist at Kurt Salmon told Banjo. "If you don’t care about losing a lot of money, sure, you can pull this off," Sucharita Mulpuru, an analyst with Forrester Research added to Clifford. "The question is: Can you pull this off profitably? I’m not convinced."
But as far as consumers are concerned, for now Walmart's experiment has no end date, according to Amy Lester, a company spokesperson. And if Amazon keeps plucking Walmart shoppers from the aisles, as Clifford put it, with their same-day delivery, we imagine the bricks and mortar retailer will try to make this move work.
This article is from the archive of our partner The Wire.