WMT Walmart Inc

By Sarah Nassauer 

Walmart Inc. will offer next-day delivery to more U.S. homes, seeking to boost shipping speeds as rival Amazon.com Inc. said it plans to invest $800 million to expand one-day delivery.

Walmart this week will begin offering free next-day shipping on about 200,000 products for shoppers in Phoenix, Las Vegas and Southern California, with more areas to be added later this year. The offer applies only to orders of $35 or more, and orders will be shipped in one box to address common customer complaints about multiple boxes arriving at different times, said Marc Lore, head of Walmart U.S. e-commerce.

The next-day-shipping model will lower Walmart's cost per delivery, said Mr. Lore, because shoppers will only be able to buy items available in warehouses near their homes and all items in an order will arrive together.

Walmart's announcement comes ahead of its earnings release Thursday and in the wake of Amazon's announcement earlier this month that next-day shipping will become standard for members of its Prime program. The $115-a-yearPrime membership currently offers free two-day shipping, along with other perks like movie streaming. It has long been a linchpin of Amazon's success, establishing online shopper expectations for fast shipping that other retailers have worked to match.

Walmart started offering free two-day shipping for orders of at least $35 two years ago, after the retailer scrapped a $49-a-year rival to Prime dubbed ShippingPass. Walmart, the country's largest seller of food, is also adding online grocery pickup and delivery to more stores.

To achieve its next-day shipping expansion, Walmart worked for the past two years to reduce the time it takes workers to pack up orders and find products, including by using new technology to route workers through warehouses, said Alex Krueger, senior vice president of e-commerce fulfillment for Walmart U.S. "We can see where our associates are in our system and reduce their walk time," to find items, said Mr. Krueger.

Shoppers will only see products available for next-day shipping if the item is close enough to be sent via ground shipping, said Mr. Lore. "There's no incremental investment we need to do to do next-day," he said.

Amazon's network includes hundreds of fulfillment, sorting and delivery centers. Its one-day-shipping investment will add products and ZIP Codes available for the service globally, but Amazon hasn't specified when the policy will be implemented.

There are signs Walmart is taking market share online, in part by ramping up online groceries sales through pickup and delivery options. But Walmart's e-commerce sales are a small percentage of the retail giant's overall sales and a small percentage of e-commerce sales overall. Walmart U.S. e-commerce sales grew by 40% to $15.7 billion, including online grocery sales, in the fiscal year ended Jan. 31.

Walmart has said it expects its U.S. e-commerce sales to grow around 35% this year.

Write to Sarah Nassauer at sarah.nassauer@wsj.com

(END) Dow Jones Newswires

May 14, 2019 00:15 ET (04:15 GMT)

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