Wal-Mart Same-Day Delivery Being Tested In Select Markets
Wal-Mart is jumping into the same-day delivery business, preparing a distribution product that will go head-to-head with Amazon’s own fulfillment center goals.
The program is currently being tested in several US cities but could rapidly expand if the program is a success. The news comes at a time when Wal-Mart is increasingly viewing Amazon as its main competitor in the retail space.
Amazon has won over millions of customers with its super cheap $79 Amazon Prime member accounts. Those premium accounts give users access to free two-day shipping for a full 12 months and the ability to stream thousands of free movies, TV shows, and documentaries among other value added services.
Wal-Mart may have a starting advantage with its new service since it is utilizing its 4,000 stores to deliver goods. Amazon, in comparison, must currently ship items from just 40 distribution center locations spread throughout various parts of the United States.
While Amazon, Wal-Mart, and other providers may be attempting to woo customers with same day order fulfillment, analysts warn that the massive costs associated with same-day shipping fulfillment could cut into profits and eventually fail to deliver for shareholders.
One analyst tells the New York Times:
“The question is: Can you pull this off profitably? I’m not convinced.”
As Newser points out, the program will likely only benefit customers in big cities who often do not own a vehicle. In areas with accessible transportation, paying $10 to have items delivered within a four hour window might not be a satisfying option for customers.
