Is Wal-Mart's same-day delivery threat to Amazon?

The country's largest brick-and-mortar retailer is trying to beat the e-tail giant at its own game.

By Oct 11, 2012 11:32AM

Wal-Mart store in Secaucus, New Jersey, Jin Lee, Bloomberg via Getty ImagesThis week, Wal-Mart (WMT) rolled out Wal-Mart To Go, a same-day delivery service for online orders that will be offered throughout the holiday season. The service, which will tack on $10 per order regardless of size, is already available in Philadelphia and northern Virginia, and will soon spread to Minneapolis, San Jose, and San Francisco. 

Capitalizing on customers' increased preference for ordering merchandise online, the move is meant to send shivers down the spine of Amazon (AMZ), which has been almost frighteningly successful in pushing traditional brick-and-mortar retailers toward the brink of failure.

 Amazon's own same-day delivery service, introduced in 2009, currently operates in 10 U.S. markets. 

So should Amazon be worried?

Wal-Mart has one significant advantage: Its program "highlights the key advantage enjoyed by the world's biggest retailer in the race to get customers what they want, when they want it: Location, location, location," says Marcus Wholsen at Wired. Instead of relying on a handful of distribution centers, as Amazon does, Wal-Mart has nearly 4,000 stores across the country that can deliver goods. "Proximity of goods to customers is essential to shortening delivery waits," says Wholsen. "Turns out one of the most promising ways to succeed at e-commerce might be to have a real store after all."

And this could change the way people shop at Wal-Mart: Amazon should definitely be concerned if Wal-Mart becomes synonymous with same-day delivery. "The first retailer to master same-day delivery on a wide scale could attract customers who have avoided online purchases because they wanted items immediately," says Stephanie Clifford at The New York Times, "and encourage current shoppers to add products that they usually buy from supermarkets or drugstores, including celery and toothpaste."

But Amazon still has a leaner operation: Analysts are still skeptical that Wal-Mart can pull it off. "Shipping from stores, rather than warehouses as Amazon does, is expensive," says Shelly Banjo at The Wall Street Journal. Analysts say it could be four times more expensive for a retailer to locate and ship merchandise, compared to a distribution center with a streamlined, automated process.

More from The Week

Oct 11, 2012 2:06PM
Now that the Peoples Republic of Kalifornia is requiring Amazon and other online retailers to collect state sales tax, I won't be buying online anymore. Why should I pay for shipping and sales tax?
Oct 11, 2012 3:05PM
And just remember one thing folks; if you live in a state that levies a sales tax, and there is a Walmart physically in your state, you WILL pay a SALES TAX on your order plus the $10 shipping charge. and besides Amazon still has a better selection and a HELL of a lot better customer service and return policy than Walmart could even dream of.
Oct 11, 2012 3:36PM
Sales tax isn't an issue for me, it's about convenience and product availablilty. Amazon online is excellent, and Walmart on line is very good. I buy locally when I can, but you can't always do that.
Oct 11, 2012 2:26PM
Amazon, have International Shipping when you Order online... Does Walmart have International Shipping? 
Oct 11, 2012 2:18PM
Many times if you hit a desired minimum the shipping cost is free.  You are going to pay sales tax if you buy if the store so what's the difference?  Unless there is no sales tax on that particular category in that state.  We shuold all move to Delaware where they have the tax fee life.
Oct 11, 2012 5:26PM
Walmart is a monster, it tries to get into every market and close them down...
Oct 11, 2012 4:13PM
If there is a tax for something that I want to purchase, then I want to pay it even if it benefits some thing or some else.  Why be so cheap?
Oct 11, 2012 4:27PM
With Amazon you can stay at home, shop 24 hrs. a day, not stand in lines with the low lifes at
Wal-Mart, not use gas, put ware and tare on your car, boycott Wal-Mart, help the delivery service
people that are not getting paid crumby wages with no benefits, and become more technology friendly and be more green.  Yes, you are right as I do not shop at or like to go into any Wal-Mart.
I feel sorry for all of their employees and they should be paid more and treated comparably to 
Costco and Target employees.  Amen!
Oct 11, 2012 3:37PM
Another case of people wanting something for nothing.  "I don't want to pay sales tax or shipping" but I want good roads, public safety etc.  States without sales tax are usually the ones with outrageous property taxes and.........they don't take advantage of tourist dollars coming in to buy.
Oct 11, 2012 3:08PM
Amazon's slow-as-molasses free "Super-Saver Shipping" is a joke. They need to do better than that if they expect to compete.

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