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Walmart Commits to Free One-Day Shipping: 'It Will Cost Us Less'

16 May 2019

There will be a cut-off time for orders to be received to be delivered the next day and the cut-off time will vary by location.

Lore said that next-day shipping costs Walmart less, rather than more, as the eligible items come from a single fulfillment center closest to the customer, meaning they ship in one box, or as few as possible, and cover less ground. Walmart plans to add Southern California to the mix in the coming days, and says it will roll out to around 75 percent of the United States population by the end of the year. The discounter plans to roll out the service to 75% of the USA population by year-end.

By the end of 2019, Walmart expects to expand the one-day shipping offer to include 40 of the top 50 major USA metro areas. Unlike Amazon, Walmart won't require a membership fee.

The service will be available for approximately 220,000 items that are "most frequently purchased" online. This means the order ships in one box, or as few as possible, and it travels a shorter distance via affordable ground shipping.

The move comes on the heels of online marketplace giant Amazon announcing one-day delivery to Prime members on most items. The U.S. business could see a drag on operating margins of 5 basis points on an annualized basis and 3 basis points for Walmart overall over a similar period if they follow Amazon's one-day shipping offer, the note says.

Lore said NextDay delivery would complement Walmart's enormously successful grocery pickup and delivery offer. Everything that the user places into the NextDay delivery cart must be eligible to get the free delivery. "That's in contrast to online orders that come in multiple boxes from multiple locations, which can be quite costly". We're on track to offer Grocery Pickup from 3,100 stores and same-day Grocery Delivery from 1,600 stores by year-end, which will provide coverage to approximately 80% and 50% of the USA population, respectively.

Walmart and Target have been turning their physical stores into shipping hubs, speeding up deliveries and helping to defray costs for services like curbside delivery and in-store pickup.

He also said the recently implemented tariffs on Chinese imports will not hurt demand as most are best-sellers and popular items that shoppers will keep buying even if prices rise.

Walmart Commits to Free One-Day Shipping: 'It Will Cost Us Less'