In a move surprising no one except for the timing, Walmart announced it’s dropping the $35 minimum order threshold for shoppers to qualify for same-day delivery with its Walmart Express service, just months after doing the same for members of its Walmart+ subscription program.
The service is not cheap, however. Shoppers pay $10 for the Express service, on top of a standard delivery charge of $7.95 or $9.95. For Walmart+ members, it’s just the $10 Express charge; that service costs $98 per year or $12.95 per month.
“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,” said Tom Ward, Senior Vice President of Customer Product for Walmart in a blog post.
Consumer Intelligence Research Partners (CIRP) said last month that as of Jan. 30, Walmart+ had 7.4 million to 8.2 million members, representing 13%-14% of its online customers, just four months after its launch. CIRP also said customers spent $1,000 per year on average at Walmart.com.
Free same-day delivery is available to Amazon Prime members, who pay $119 per year or $12.95 per month for the privilege, and get a boatload of perks besides. Its growing army of contracted sprinters and stepvans has become as visible on the road as UPS, FedEx and the U.S. Postal Service.
About 160,000 items are available for Walmart Express delivery, including food, consumables and general merchandise such as produce, pantry staples, everyday essentials, toys and electronics. About 170,000 associates act as personal shoppers pick the orders.
Walmart uses a variety of service providers for delivery, including Postmates, DoorDash, Roadie and Point Pickup. Express is available from 3,000 of Walmart’s 5,300 U.S. stores, covering 70% of the population.
On the back end, Walmart is investing heavily to fulfill its rapidly growing ecommerce orders, same day or not. In January, the company announced plans to create dozens of store-based micro fulfillment centers initially, with more to come after that.
While Amazon is light years ahead in terms of ecommerce volume, Walmart has been experiencing faster digital growth over the past year as shoppers have been flocking to it in the midst of the pandemic.
In its fiscal fourth quarter ended Jan. 31, Walmart’s ecommerce growth fell to 69%, after hitting a high of nearly 100% in Q2, when lockdowns were in full swing, then registered 80% in Q3. Walmart was hammered by Wall Street for missing its Q4 and full year earnings estimates, after investing $11 billion last year on automation, supply chain and COVID-related expenses. The capital budget for this fiscal year is $14 billion as it continues to evolve into a digital powerhouse.