Walmart Same-Day Trial: Can Dec. 24 Be E-tail Windfall?Written by Evan Schuman
Move over in-store mobile integration. It seems that same-day delivery is the coolest retail fad this holiday season, with Walmart this week joining Amazon and eBay (which are doing it) and Macy’s (which is seriously considering it), having figured out an impressively low-cost way of doing so.
Walmart’s effort is impressive, despite a handful of site hiccups we encountered, including a revolving-door customer service number and price warnings that seem at odds with the chain’s pricing policy. The big test will come on December 24. Given the huge financial value placed on every holiday shopping day, it’s interesting that many holiday shoppers are forced to give up online shopping after about December 19 or 20, due to shipping delays. Could a robust same-day delivery program make December 24 fully E-Commerce viable? (Have I been known to drive to the mall at 11:00 PM on December 24 for a last-minute forgotten gift? No comment.)
It’s not clear for this year’s trials what the Christmas Eve policies will be for any of these retailers, but the fiscal potential for future years is definite.
Walmart’s approach fits squarely in between the approach being trialed by Amazon, which is only available to customers paying extra for Amazon Prime service, and the methods being tested by eBay, where each delivery will cost shoppers $5 after they use three fully free deliveries.
The key questions of any same-day delivery are: “How early must I place an order for same-day delivery?” “How quickly will it get here?” “At what cost?” “What types of product limitations are there?” The three early players have all taken very different routes on all these issues.
Amazon has been the most strict, insisting that same-day orders in two of its test cities must be placed by 7:00 AM local time. Walmart’s cutoff is a much more leisurely noon local time for each of its four test metro regions: Philadelphia, Minneapolis, northern Virginia and a chunk of northern California from San Jose to San Francisco. eBay’s approach doesn’t have a concrete cutoff time, because couriers are dispatched throughout the day.
Amazon’s price starts with shoppers having to pay $79 per year to join Amazon Prime, and it then charges $8.99 for same-day delivery (a giftcard costs only $3.99). eBay has various incentive discounts, but it then settled on $5 each. Walmart is charging a flat $10.
To be precise, we have no field testing of how long these services are actually taking to do deliveries, so the comparisons are merely based on the program claims. Amazon isn’t promising delivery until 8:00 PM. eBay is promising one hour after the order is placed (to be handled by courier). Walmart is promising a four-hour window, at the customer’s choice, with the earliest window being 4:00 PM to 8:00 PM. In effect, that means its promise is the same as Amazon’s: 8:00 PM. Walmart’s deliveries are all being handled by UPS.
This is a much more difficult comparison, given the different ways the initial players have structured their programs. Walmart has released a clean figure: 5,000 of what it considers its most popular items in electronics, music, toys, movies and books. Not coincidentally, this campaign is intended for the holidays, so these are the most gift-oriented items. (A different Walmart same-day delivery that’s been done in California focused on grocery.) The eBay and Amazon programs are more dependent on what retail and consumer goods partners are pushing.