This week Walmart has expanded the next-day delivery service to Massachusetts, Missouri, Virginia, and West Virginia, growing the number of states with next-day delivery to 33, according to Marketplace Pulse research.
Walmart’s next-day offer debuted in May for customers in Arizona, California, and Nevada. A month later, at the end of June, it launched in 13 states on the east coast. Then in early July, it added 13 more states, including Texas and New York. With the four more states added this week next-day coverage is getting closer to the 75% of the US population goal Walmart has set out to reach by the end of the year.
However, the number of products available with next-day delivery is small. Arizona, California, and Nevada, the first three states next-day launched in, remain with the most products available with the fast delivery - 134,000 products. New York, New Jersey, Pensylvania, and the surrounding states have the least, only 84,000 products available. The rest of the states fall somewhere in the middle.
Walmart introduced next-day delivery just weeks after Amazon said it would spend $800 million to evolve Prime free two-day shipping to be free next-day shipping. Amazon missed its profit target for the second quarter of 2019, as a result of higher-than-expected costs associated with the move to next-day shipping. CFO Brian Olsavsky said Amazon’s costs for next-day shipping were higher than the $800 million the company expected, but the company will continue to ramp up the offering.
“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 US. Recode’s Jason Del Rey wrote that Walmart is projecting losses of more than $1 billion for its US e-commerce division this year, on revenue of between $21 billion and $22 billion. Given Amazon’s spending to upgrade warehouses for next-day shipping, it’s hard not to expect Walmart’s losses for its e-commerce division to further increase, despite the company alluding that next-day delivery will cost it less.
