Will Walmart Really Be Able to Challenge Amazon and Others on Deliveries?

News has been out all day about same-day delivery being tested by Wal-Mart Stores Inc. (NYSE: WMT). The move, if successful and if launched, is an obvious front to challenge the likes of Amazon.com Inc. (NASDAQ: AMZN) and other services. The tests have been ongoing in Philadelphia and in Northern Virginia for merchandise bought online. Before getting too excited, this really looks like a continued evolution of the business model as Walmart is looking for ways to go out and recapture revenues that have gone around it over the last decade or so.

If you have tracked the Walmart and competitor layaway plans, it is no secret that Walmart and other retailers are getting into a price-war and a low-cost services war for every dollar spent this coming holiday season. Again, this all threatens Amazon.com if you believe that Walmart shoppers are going after Amazon's top customers. The problem is that Amazon Prime customers are real loyalists and only pay $79 per year, but those loyalists also act to squeeze Amazon margins as well.

It is worth noting that Walmart already uses some brick-and-mortar stores to fulfill some online orders. That alone will cut down massively on distribution costs, but obviously there are limitations here based upon geography. Walmart has users paying a flat fee, but that alone might not be enough. Traditionally it has been such that Walmart buyers go buy their goods at Walmart's real stores or they buy online goods at Amazon.com or elsewhere. Maybe that will change and maybe it will not.

In the world of electronics, Walmart has a huge opportunity to compete against Best Buy Co. (NYSE: BBY) as Best Buy is often not exactly the fastest at delivering goods for installation. There is a reason that Best Buy is often considered merely to be a physical showroom for sales that end up going through the Amazon.com system.

It is worth noting that Freeshipping.org shows free shipping on orders of $45 or more on over 100,000 items. Walmart is still trying to catch up to the online world and so far it is playing a game of catch-up. The latest news is one more step in the evolutionary process.

JON C. OGG


Increase your money and finance knowledge from home

Small Cap Investing

Learn now to invest in small companies the right way.

View Course »

Investing in Emerging Markets

Learn to invest in a globalized world.

View Course »

Add a Comment

*0 / 3000 Character Maximum

8 Comments

Filter by:
jpoopoopadoo

When people become more aware of Walmart's loathsome true nature, they'll no longer want to have anything to do with them. For an example of who these people are, go to WalmartCruelty.com

October 10 2012 at 11:01 PM Report abuse rate up rate down Reply
rhmattingly

Takes Walmart over 2 weeks just to Ship items to a local store, for pick up!!!! Or one pays $$ per item to ship to home... Have started using Walmart less and less, due to their Quality of merchandise and service!! Even prices can be beat, if one shops though local ads for what they need. Amazon, works for your business and insures you are satisfied.

October 10 2012 at 10:41 AM Report abuse +2 rate up rate down Reply
rhmattingly

Walmart has a LONG way to go to compare with Amazon...Just ordered 6 items from Walmart. (going to pick up at Local location) still takes over takes over 2 weeks....OR I must pay for shipment of each item (separate). Will NOW only use Walmart, (if I happen to stop in);which (you if you watch ads) its becoming cheaper with better service to shop else where.

October 10 2012 at 10:31 AM Report abuse +2 rate up rate down Reply
rogertool2

NO WAY will they even come close! They have the worst on line shopping I have ever expereinced...probably will take a year to get a refund because no one from customre service, billing dept or store mgs have a clue how to resolve problems! I will never shop Walmart on-line AGAIN!

October 10 2012 at 10:15 AM Report abuse +2 rate up rate down Reply
bobiniowa538

Type Recently ordered six pack of bulbs from Walmart. Took 12 days to get and then only one bulb in package. Compete with Amazon? No way!

October 10 2012 at 8:51 AM Report abuse +2 rate up rate down Reply
kittenblu

You are not going to win Walmart.People are tired of you trying to reach your greasy little hands into everyone elses back pocket. Stick to what you know. Importing cheap plastic crap from china. Next Walmart should take on McDonalds. McWalmart Burgers. Maybe Walmart should go into the health care business too. Import its doctors from India or something. Greed, pure Greed.

October 10 2012 at 8:46 AM Report abuse rate up rate down Reply
1 reply to kittenblu's comment
aaldrew

I like Walmart

October 10 2012 at 6:15 PM Report abuse rate up rate down Reply
loverbuggy

one word...........NO

October 10 2012 at 7:30 AM Report abuse rate up rate down Reply