Walmart’s last-mile capabilities have rapidly evolved throughout the pandemic, and less than a year after piloting its Express delivery service, the retail giant is dropping the $35 order minimum required for shoppers to get same-day delivery to their doorstep.
Express allows customers to order more than 160,000 items from Walmart’s food, consumables and general merchandise assortment, such as produce, pantry staples, everyday essentials, toys and electronics, and have them delivered within two hours.
The service relies on the retailer’s team of 170,000 trained personal shoppers who pick customers’ orders. Like Walmart’s pickup and delivery service, there is no markup on items—an item is priced the same as it is on the shelf. The function still comes with an added delivery fee, which costs an added $10 on top of the existing delivery charge. Walmart+ members just pay the $10 delivery fee.
“Many customers use Express delivery for when they’re in a pinch, whether it be a missing ingredient for a weeknight dinner or a pack of diapers,” Tom Ward, senior vice president of customer product of Walmart, wrote in a blog post. “Customers told us sometimes the items they needed in a hurry didn’t meet the minimum, so we’re removing it, making it even easier for customers to get what they need when they need it.”
Walmart waived the $35 order minimum for all shoppers two months after it did away with the requirement for Walmart+ members for free next-day or two-day shipping, taking a shot at Amazon’s popular Prime service.
Related Stories
Walmart CEO Doug McMillon said during Morgan Stanley’s Virtual Global Consumer and Retail Conference in December that the move was another way to reduce friction in the shopping process.
“[We] heard loud and clear from customers that purchased a Walmart+ membership that they didn’t expect to have a minimum for e-commerce orders,” McMillon said. “And so we were pleased as we got through the month of November, that we had the outbound shipping in such a place that we felt comfortable we could remove it, and still deliver with speed between now and Christmas.”
Express is currently offered in nearly 3,000 of Walmart’s 4,743 U.S. stores, reaching nearly 70 percent of the U.S. population. The company accelerated the development of its Express service to nearly 1,000 stores in early May when widespread lockdowns kept virus-weary consumers at home and out of stores.
While Express has waived the delivery fee for goods purchased within the service, Walmart’s various other omnichannel fulfillment options continue to carry the $35 order minimum. Walmart shoppers who want free curbside pickup at a specific time and location need their order to be at least $35. Orders that have a per-delivery fee of $7.95 or $9.95 also will still include the $35 minimum. And while Walmart+ members have the minimum waived for next-day and two-day shipping, the $35 still applies for most same-day deliveries on items not within the Express umbrella.
Meyar Sheik, chief commerce officer for omnichannel specialist, Kibo, said the brick-and-mortar giant’s move “continues to raise the bar against Amazon when it comes to the customer experience.”
“Removing the $35 minimum makes it even more compelling for its 150 million customers to shop more product categories from them as well as shop with them more frequently,” Sheik said. “This move also narrows the gap between Walmart+ and Amazon Prime as it delivers more value to Walmart shoppers while potentially luring Amazon Prime members who see convenience and benefit from shopping at Walmart.com or from one its 5300 stores across the U.S.”
What’s more, Sheik added, Walmart’s “tactical move” furthers its “broader vision and long-term strategy to maximize the value for its customers by delivering product choice, value and convenience that rivals Amazon’s.”
“This strategy includes Walmart’s recent move to create a bank (Bank of Walmart),” Sheik said. “A move which would make its banking services available to its customer base across its 5300 branches.”
In the company’s fourth-quarter earnings call, McMillon discussed Walmart’s aggressive spending on automation as it bolsters its fulfillment, supply chain and customer experience initiatives across all channels. In total, Walmart’s capital expenditures will reach $14 million in fiscal 2022.
“We are absolutely playing offense here. Customers can choose to visit a store, pick up their order, have it delivered, have it delivered into a secure box on their front step into a garage, refrigerator, or all the way into their kitchen, even when they’re not at home,” McMillon said. “When you hear us say delivery, define that as the combination of delivery from our stores, clubs and e-commerce fulfillment center.”
McMillon predicts that the next few years will represent more change in the supply chain than when Walmart rolled out additional grocery distribution centers to support the retailer’s super centers.
Beyond the delivery news, Walmart also announced that it has completed its sale of 85 percent of its holding in Japanese supermarket chain Seyiu to private equity firm KKR & Co. Inc. and Rakuten. Under the transaction, KKR now is the majority stakeholder with a 65 percent share, while Rakuten owns 20 percent. Walmart has retained a 15 percent ownership stake.
The shareholders additionally confirmed the appointment of Tsuneo Okubo as CEO of Seiyu to lead the company into its next phase of development and growth, effective immediately.
“Looking ahead, we are excited to accelerate Seiyu’s digital transformation to better meet the evolving shopping needs of our customers while continuing to expand on strong in-store presence in communities across Japan,” Okubo said in a statement. “I want to thank my predecessor, Lionel Desclée, for his leadership, and I look forward to working with our talented team of associates to build on Seiyu’s progress to become Japan’s leading omnichannel retailer.”
Desclée is expected to take on a new role within Walmart.