Walmart offers grocery delivery
Walmart’s $98 delivery subscription could take on Amazon and Target
Delivery Unlimited might expand to include everything available in Walmart Supercenters.
Walmart (NYSE:WMT) currently offers unlimited grocery delivery for a $98 annual fee in four markets, and this fall, it’ll expand that to 200 markets covering 50% of the U.S. population. Delivery Unlimited takes advantage of Walmart’s massive physical footprint to take on competing services like Amazon (NASDAQ:AMZN) Prime Now and Target‘s (NYSE:TGT) Shipt. Prime and Shipt cost $119 and $99 annually, respectively.
Walmart has established itself as a leader in online grocery, and Delivery Unlimited is the next step to solidify that lead. But Walmart’s head of U.S. e-commerce noted in a recent interview with Recode that Delivery Unlimited will ultimately expand beyond groceries to include everything sold in Walmart’s Supercenters. That could be the factor that pushes more consumers to choose Walmart over Target’s same-day fulfillment options or Amazon Prime Now.
Catching up with the competition
Walmart’s focus on online grocery has put it ahead of Amazon and Target in that regard, but it’s fallen behind on rapid fulfillment of general merchandise sales. The company’s made moves recently to speed up its delivery, rolling out its NextDay program to 75% of the country well ahead of schedule. Still, it has some catching up to do.
Target has doubled down on its Shipt delivery service over the past year. First, it expanded the service to include more general merchandise in December, giving subscribers access to more of Target’s store inventory. In June, the company gave Target.com shoppers the option to pay for one-time delivery instead of subscribing to the service for a full year. It also integrated Shipt more closely with Target.com, creating a dedicated same-day delivery section of the website. Last quarter, Target noted its same-day fulfillment options — which include in-store pickup, DriveUp curbside pickup, and Shipt delivery — accounted for nearly three-quarters of its growth in digital orders.
Likewise, Amazon’s management pointed to the shift to one-day Prime shipping as a reason for acceleration in its online retail sales last quarter. Meanwhile, it continues to expand Prime Now to new markets, capitalizing on its Whole Foods Market footprint.
Read more: https://www.fool.com/investing/2019/09/14/walmart-98-delivery-could-take-on-amazon-target.aspx