Wal-Mart Tests Same-Day Delivery

The following is an excerpt from an article in:


The New York Times
Wednesday, October 10, 2012

Wal-Mart Tests Same-Day Delivery

By STEPHANIE CLIFFORD

Wal-Mart Storeskicked Amazon out of its 4,000 stores last month when it discontinued Kindle tablets and e-readers. Now, the retailer is poised to use those stores against its online rival once again — this time aiming for the heart of Amazon’s retail model.

Wal-Mart said Tuesday it had begun testing same-day delivery for online purchases in a handful of cities across the country.

The near-instant delivery is possible because the merchandise is being shipped from Walmart stores.

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, and encourage current shoppers to add products that they usually buy from supermarkets or drugstores, including celery and toothpaste.

But some retail analysts are questioning whether the expense and difficulty of same-day delivery would be worth it.

Amazon is the world’s largest online retailer, and in an interview last month, Jeff Bezos, its chief executive, said that the company was striving for same-day delivery in metropolitan areas. Its Web site says same-day delivery is available in limited cases. Mr. Bezos said Amazon would soon be able to cut as much as a day off its shipping times, raising the possibility of same-day delivery in cities where it has distribution centers.

If Wal-Mart expanded its same-day shipping across the country, it could essentially transform the more than 4,000 Walmarts, along with Sam’s Club and other divisions, into distribution centers. Amazon, by contrast, had fewer than 40 distribution centers in the United States at the end of last year and has plans to add about 20 worldwide this year.

“Everybody in retail is terrified of Amazon, and they’re terrified of losing more wallet share to Amazon,” said Sucharita Mulpuru, an analyst with Forrester Research. The Wal-Mart move is “to try to get ahead of the curve if Amazon does introduce something like this.”

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