Walmart fights back against Amazon with one-day shipping in some US markets

Walmart’s one-day shipping marks the latest salvo in a fight between two retailers that have consistently tried to outdo each other. (Reuters)
Updated 14 May 2019

Walmart fights back against Amazon with one-day shipping in some US markets

  • The Walmart deal will be available to online shoppers in Phoenix and Las Vegas and then expand to Southern California in the coming days
  • The service will be rolled out gradually, with a plan to reach approximately 75 percent of the US population this year

WASHINGTON: Walmart is stepping up its battle with Amazon.com by offering one-day delivery without a shipping fee, weeks after Amazon announced a similar offer — a move that will intensify the race to deliver orders to shoppers faster.
On April 25, Amazon said it plans to deliver packages to members of its loyalty club Prime in just one day and expects to spend $800 million toward the shipping goal in the second quarter alone.
Walmart’s offer applies to fewer products. As many as 220,000 items, which are the most frequently purchased, ranging from laundry detergent to toys and electronics will qualify for one-day shipping. The orders have to be worth at least $35 to qualify.
The Walmart deal will be available to online shoppers in Phoenix and Las Vegas and then expand to Southern California in the coming days, the head of its US ecommerce service, Marc Lore, told Reuters in an interview.
The service will be rolled out gradually, with a plan to reach approximately 75 percent of the US population this year, which includes 40 of the top 50 US metro areas, Lore said.
One-day shipping marks the latest salvo in a fight between two retailers that have consistently tried to outdo each other in everything from online order delivery to grabbing a bigger share of the online grocery market. Walmart started offering same-day pickup in its stores in 2011 and caught up with Amazon’s two-day free shipping two years ago by offering it without a membership fee. It has made progress in closing the gap with its e-commerce rival by rolling out services such as curbside grocery pickup and same-day grocery delivery — options that have quickly become popular with shoppers.
Amazon, on the other hand, has hastened to reproduce the assets of brick-and-mortar rivals such as Walmart and has a mixed record with those projects. It is now racing to open shops with top-selling items ranging from books to cell phones; rolling out same-day curbside grocery pickup and gearing up to accept returns at all US Kohls Corp. department stores.
“We have been working on this since I have gotten here ... we have been building out the infrastructure for the last few years to support this,” said Lore, who joined the retailer in 2016 when it acquired his company, Jet.com.
The vast majority of the order volume for such a service comes from the “first couple of hundred thousand” products, he said.
The move will cost Walmart less as orders will be delivered from warehouses closer to the customer and arrive in a single box instead of multiple packages, Lore said.
“It is counter-intuitive... but the way we have structured our network, we will see improved profitability as a result of lower shipping cost,” he said.
Walmart sends out boxes from multiple warehouses around the country under its two-day shipping program, but with one-day shipping, it is stocking inventory in the closest single warehouse to the shopper, Lore said.


Holiday Inn-owner IHG hit by weak China, Hong Kong bookings

Updated 15 min 22 sec ago

Holiday Inn-owner IHG hit by weak China, Hong Kong bookings

  • IHG’s revenue fall comes amid a general slowdown in the global hotel industry
  • Company opened 13,000 rooms in Q3

Holiday Inn-owner InterContinental Hotels Group blamed lower business bookings in China and Hong Kong protests for a 0.8% fall in third-quarter revenue per room on Friday, the latest company to be pinched by weaker global travel.
The hotel industry in general is feeling the impact of slowing global growth, which is denting business travel. Rival Hilton Worldwide Holdings Inc. warned that lagging growth in China and the China-US trade war would hurt revenue. Raffles owner AccorHotels narrowed its full-year profit guidance, citing uncertainty on China-related issues.
Four months of protests in Hong Kong have taken a toll on tourism, while weak economic data from China has been discouraging.
IHG reported a 6.1% fall in revenue per available room (RevPAR) in Greater China during the quarter, with a 36% drop in Hong Kong. (https://reut.rs/35Lf0Jl)
“While we are certainly not at the stage where business travel has been scaled back on a large scale, the cracks are certainly showing,” AJ Bell’s Investment Director Russ Mould said.
Shares in IHG, which has nearly 5,800 hotels including the Crowne Plaza and Regent Hotels & Resorts brands, fell nearly 2% in early trade on Friday.
The company has been putting more money into China, its fastest-growing market, using new loyalty programs, digital payment options and revamping rooms at Holiday Inn to woo local business travelers. Of the 13,000 rooms IHG opened across its brands in the quarter, 4,100 were in China.
But Chief Financial Officer Paul Edgecliffe-Johnson said the company was seeing more leisure than business travelers, who tend to spend less money on bookings.
Edgecliffe-Johnson said the company had also seen some pressure in the United States as US manufacturing businesses cut spending on conference halls bookings during the third quarter.