In a bid to outpace Amazon, Wal-Mart is now testing same-day delivery in a handful of locations across the country.
The stakes are high: The first retailer to master same-day delivery could potentially grab customers shopping for groceries to birthday gifts to home furniture. It combines the ease of online ordering with nearly the same instant results possible at a physical store.
The Wal-Mart tests, the first of which started last week in the Washington suburbs, let customers order toys and other popular gifts, and have them delivered to their homes the same day. The service is $10, and there is no minimum purchase.
Essentially, the move transforms the more than 4,000 local Wal-Mart stores into distribution centers. Amazon, by contrast, had fewer than 40 warehouses at the end of last year.
Physical retailers have been trying to figure out how to turn their stores into competitive advantages. With their staff, their inventory and their real estate, the stores have many costs that online retailers do not have to deal with. Wal-Mart and several other retailers have started using the stores to offer services to online shoppers, including shipping (but not same-day), free returns, payment centers and a service that lets shoppers order online and pick up in store.
However, few retailers offer same-day delivery, as few have enough locations to make it feasible, not to mention the cost and logistical hassle.
Wal-Mart has been testing same-day grocery delivery for more than two years in San Jose, Calif., and now offers it in San Francisco as well. But this is the first time it is trying to ship general merchandise within a day.
To receive the order on the same day, consumers must place an order before noon, and select a four-hour window for when they want the items delivered. United Parcel Service is handling deliveries. The current test includes toys, sports equipment, home decor and electronics – all popular holiday items.
Amazon has offered limited items, in limited areas, for same-day delivery since 2009. Now, though, it appears to be broadening its same-day goals. When it recently said it would add almost 20 warehouses this year – and agreed to start paying sales tax in some states – that generated speculation that Amazon was preparing to offer same-day delivery in major cities.
Amazon’s popular Prime service, for which consumers pay $79 a year, offers free two-day shipping.
“Prime members buy at a faster rate in all categories,” Jeff Bezos, Amazon’s chief executive, said in an interview earlier this year. “One of the big advantages of Amazon for consumers is that they can get one box with a lot of things in it from different categories.”
The Wal-Mart program is already running in northern Virginia and Philadelphia. It was introduced on Tuesday in Minneapolis, and the San Jose and San Francisco areas that are already part of the grocery test will be included in this toys-and-gifts test later this fall.