As they say, business it business. But it sure seems like Walmart has an axe to grind with Amazon! Last month, Wally announced they were no longer carrying Amazon’s Kindle. Now, they are going to compete with Amazon’s experimental same-day delivery.
Called Wal-Mart To Go, the service costs $10 regardless of the size of the order. The products will be shipped from the company’s stores, not from a warehouse or distribution center. Wal-Mart began testing the same-day service last week in Philadelphia and northern Virginia. It added Minneapolis on Tuesday and will add San Jose and San Francisco later this month. The trial will last through the holidays. Wall Street Journal
Amazon has been doing the same-day thing in 10 cities for a few years now. Amazon has about $35 billion in online sales each year, about 7 times Walmart’s take. BUT, Wally’s $5 billion is about 1% of their total sales. So, that kind of capital allows them to experiment to find ways to compete with the established leader Amazon.
Analysts say that Walmart is going to need that cash flow to make it work…
“It can be three to four times the cost for the retailer to pick items and pack them from a store versus having a really efficient, automated process back in a distribution center.” Wall Street Journal
So, what do you think? Does this sound like a good move for Wally? Or should they stick to what they know best and leave the online fulfillment game to the recognized leaders? Read the article, and have a great weekend!