Walmart to launch one-day shipping to rival Amazon

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The order is more likely to come in one box and travel the shortest distance, two factors that contribute to shipping costs.

Walmart says some 220,000 items, ranging from diapers to housewares to electronics, will be available for next day shipping.

The option will first be available in Phoenix and Las Vegas, and Walmart will add it to southern California in the coming days.

Walmart is rolling out next-day delivery beginning in Phoenix, Las Vegas, and Southern California, with plans to reach approximately 75% of the United States population this year. The aim is to have 75 percent of the USA population covered by the end of 2019, which will include 40 of the top 50 United States metro areas.

"Contrary to what you might think, it will cost us less - not more - to deliver orders the next day", said Marc Lore, President and CEO, Walmart eCommerce U.S. To fight the increasing pressure from Amazon, Walmart has announced a new program that offers free NextDay delivery without requiring users to pay money and become a member as Prime does.

Walmart is piloting its own next-day delivery service - but with a competitive twist. It is available on eligible orders of $35 or more, with the specific assortment varying by customer location. "This means the order ships in one box, or as few as possible, and it travels a shorter distance via cheap ground shipping", he says.

Lore said NextDay delivery would complement Walmart's enormously successful grocery pickup and delivery offer. The U.S. business could see a drag on operating margins of 5 basis points on an annualized basis and 3 basis points for Walmart overall over a similar period if they follow Amazon's one-day shipping offer, the note says. All items in the basket must be eligible for NextDay shipping. We're on track to offer Grocery Pickup from 3,100 stores and same-day Grocery Delivery from 1,600 stores by year-end, which will provide coverage to approximately 80% and 50% of the USA population, respectively. Cut-off times will vary by location, according to the company. The free offer to consumers keeps Walmart "in the game" against online rival Amazon.com, Inc. The timing is interesting as it comes less than three weeks after Amazon said it would spend $800 million in the second quarter alone to make one-day delivery the standard for its Prime fast-shipping program.

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