Same-Day Delivery at Wal-Mart

As of early October 2012, Wal-Mart launched a same-day delivery service for orders placed online. Wal-Mart began testing the service in Philadelphia and Virgin, but plans to continue adding cities through the holiday season. The company announced that the service will cost $10 regardless of order size and orders will be shipped directly from Wal-Mart stores. The orders must be placed before noon and will be delivered within a four-hour time period via United Parcel Services. Wal-Mart is only offering a select number of products to be shipped using the same-day delivery service.

Wal-Mart launched this initiative in order to better compete with Amazon’s highly successful delivery system. Few offline retailers offer same-day delivery services; Wal-Mart has numerous retail locations to make this task feasible. Wal-Mart will be shipping orders directly from stores whereas Amazon uses warehouses and distribution centers. It is believed that Wal-Mart’s attempt to ship from retail outlets will be three to four times as costly as shipping from a warehouse or distribution center. Amazon is also offering lower prices and currently operating the same-day delivery system in more cities compared to Wal-Mart.

In an attempt to reach the millions of people who do not use credit cards or do not feel comfortable sharing financial information online, Wal-Mart is allowing customers to order merchandise online and pay at a retail store. Executives at Wal-Mart hope this advantage will increase same-day delivery demand and take customers away from using Amazon’s website. Wal-Mart invested in offering same-day delivery in attempt to turn its physical retail outlets into a competitive advantage. They have costs that many online retailers do not have, such as real estate, inventory, and staff expenses. Wal-Mart hopes to boost sales and improve profitability through the unique delivery system that uses retail stores instead of warehouses or distribution centers.

You can find more information on this topic using the following websites:

http://www.nytimes.com/2012/10/10/business/wal-mart-tests-same-day-delivery.html?_r=0

http://online.wsj.com/article/SB10000872396390444897304578046461338658772.html

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