In the age of free 2-day freight with Prime, getting companies can challenge Amazon's dominance when it comes to products that come right outside your door at easy speed.
Well, to this day. Walmart launches free, one-day shipping of 220,000 items from batteries to diapers, as long as you order $ 35 or more. The initiative is being launched in Las Vegas and the Phoenix area this week. Other markets will soon follow. Walmart reports that its daily shipment will reach 75% of the US population by the end of the year.
It is a bold move for a company that notoriously overlooked the online store while Amazon grew into dominance over the past 20 years. But Walmart has been working aggressively to correct their mistake, having recently launched a smart and beautiful new site and an experimentally connected store that is somehow smarter and less intrusive than the Amazon Go.
The struggle to save both physical and digital retail from a complete Amazon takeover is very real. Retailers try countless strategies to stand out: Some have eye-catching, instagrammable pop-up stores. Others, such as e-commerce juggernauts like Everlane or Wayfair, have opened bricks and mortar stores. Giants that Ikea has shrunk their stores down into urban areas, while Target has focused on launching exclusive merchandise to get you back again and again.
In particular, shipping speed has been a priority for the industry since Amazon set the stage in 2005. That was when Amazon started offering free, unlimited two-day delivery to Prime subscribers (or with a $ 35 expense). Now Prime subscribers can also pay for a day's shipping, or often get free or paid the same day's shipping. Amazon has also committed to $ 800 million in performance central upgrades to launch free one-day shipping nationwide to Prime members on an unfinished date, although it appears to be rolling out in some markets now.
In response, Target launched free two-day shipping nationwide (for REDCard holders or those spending a $ 35 min) in time for the holiday last year. A program called Target Restock allows you to order 35,000 items, including household items, such as toothpaste, for a $ 2.99. And for a $ 99 annual subscription, you can get unlimited same day bookings through Shipt, a rival Prime option.
But Walmart's announcement puts it elbow to elbow with Amazon, with no subscription fee at all. Not only is Walmart promising to ship more items faster than Amazon, it also makes it cheaper. Prime costs $ 120 a year. Target doesn't charge much for the Restock program, but costs about 10% on top of expenses. Walmart has promised a day ship for everyone who has freedom.
The promise of "low prices" is an important part of Walmart's consumer appeal, explains Janey Whiteside, EVP and Chief Customer Officer – but she insists faster shipping will actually save Walmart money as well. That's because Walmart has spent an indefinite amount of time and capital setting up a nationwide distribution center system that sounds like the Amazon's (shipments don't come from individual Walmarts, as one might expect). Earlier it was to order something online from Walmart, it could come from anywhere in the US. The order will now be sent to the nearest center, which will send it all in a single box. And that's possible because each center has a carefully cured overview of what she calls "things that are relevant to people in those places."
"In Phoenix, you are more likely to have sunscreen year-round, compared to the northwest," Whiteside explains. "It's cured to what we know is super important to place."
This localized cure is the key to Walmart's strategy in brick and mortar stores. But it also means that while Walmart will one day send 220,000 items free nationwide, no one will actually be able to order as many items from any region. (Whiteside did not reveal how many products each distribution center would hold). Other limitations to note include the fact that Walmart will not ship very large items, such as furniture, nor will it send groceries.
But it is Walmart who is the first company to promise free one-day orders nationwide at the end of this year. And Amazon is plunging to do the same – a rush demonstrates that retail is more competitive than ever, and America's older retail giants don't go down without a fight. Oh, and if you ever go to the store to buy paper towels again, you are either a sucker or you have a lot of time on your hands.