For years, Amazon was my default option when I wanted quick delivery.
As a Prime member, I get free two-day delivery, and in many cases, the online giant actually delivers the next day, sometimes even before 8 a.m.
That’s a bar Walmart wants to raise.
Fast Company writer Elizabeth Segran shared how she dropped Amazon for Walmart after her husband got a free Walmart+ membership through American Express.
“When our 4-year-old announced she would eat nothing but Uncrustables for the foreseeable future, a box arrived within the hour. The prices were lower than on Amazon, and we got them faster, with no delivery fee. It turns out that my husband had gotten hooked on Walmart — all without ever setting foot in a store,” she wrote.
Walmart hasn’t mounted a big ad campaign or even really touted its ability to deliver faster than Amazon, but the retail giant has leveraged its one advantage over its rival to win over Prime customers.
Walmart has one edge over Amazon
While Amazon has invested billions in delivery, it has struggled to build a brick-and-mortar retail operation. Aside from Whole Foods, which the company purchased, it has largely failed as a physical retailer, having closed its bookstores and 4-Star stores, while scaling back its efforts to build a low-priced Amazon Fresh grocery chain.
Walmart has invested heavily in digital and delivery, but it has also leveraged its store network to get customers products quickly. That’s something Chief Growth Officer Seth Dallaire spoke about at the 6th Annual Evercore Consumer & Retail Conference.
“We have a unique position where our stores sit close to over 90% of U.S. households. We can get products to people quickly and like really fast,” he said.
That’s an edge Walmart has over Amazon.
“We know that as you bring items closer to the customer and you shrink the amount of time it takes to deliver those items, the conversion rates on those items and the purchase frequency increase,” he said.
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That has also helped Walmart expand its product offering.
“So when we talk with the seller about bringing their product catalog into our store, it’s not just about getting the catalog and making it available and shipping it to you in two weeks. That wouldn’t be good enough. That item might sit. When we bring that item into one of our fulfillment centers, and we’re delivering it to you same day or next day, we see the conversion rates go up,” he added.
The bar for delivery, he noted, has gone from two-day to even faster.
“Speed is what our customers want, and that fast fuels the frequency,” he added.
Walmart has a lot to overcome
While Walmart arguably can deliver many products faster than Amazon, the company has a major hill to climb when it comes to competing with Prime.
As someone who orders from Amazon nearly every day, Walmart has some catching up to do. I’m not a Walmart+ member and see little reason to join when Amazon gets me most items the next day, and when Uber Eats can bring me same-day items from Target, albeit at a slight markup.
RTM Nexus CEO Dominick Miserandino thinks Amazon has an edge, but perhaps not an insurmountable one.
“On one hand, people are used to the diversity, but they’re kind of ingrained with Amazon,” he told TheStreet. “Amazon has basically all the products people are used to, but on the other hand, the internet’s rather fickle, and when a new thing comes along after a while, that can become the go-to move.”
Miserandino believes Walmart could win customers over.
“So, I think time will tell. [As] more people use Walmart, do they find it starts to change and readapt their behaviors?” he added.
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Amazon continues to evolve
While Walmart has leaned on its retail stores, Amazon has built out its distribution network in order to offer near-instant delivery (for a price).
“If the item is needed urgently, most people will pay a premium for it to be delivered quickly. Amazon knows this, which is why it has put in place the faster delivery option. And that is exactly what it is: one delivery option among many, including same-day delivery that remains free. For Amazon, this is part of ensuring they are the go-to destination for all types of purchases,” GlobalData Managing Director Neil Saunders wrote on RetailWire.
Scott Benedict, a retail consultant with 30 years of experience, sees it as an arms race where Amazon and Walmart keep raising the stakes.
“The implication for retailers is that the competitive bar has risen. Offering faster delivery options is important, but the real opportunity lies in orchestrating speed, cost, and reliability based on the customer’s mission. The retailers that win will be those who give customers choice — fast when they need it, affordable when they don’t, and consistently reliable across every touchpoint,” he posted.
Georganne Bender, a retail author and consultant, thinks delivery speed is more about protecting its turf than actual customer need.
“Super-fast delivery speed might be critical for a small segment of consumers, but it works magic on everyone else’s perception. This is just another way that Amazon is making itself indispensable. Even if you never use this service, it’s comforting to know that it’s there,” she posted.
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