Dive Brief:
- Walmart delivered 4.4 billion items with either same-day or next-day shipping speeds in the U.S. over the past 12 months, President and CEO Doug McMillon said on an earnings call last week. The retailer delivered about 20% of those goods in under three hours.
- More customers are ordering online through Walmart as delivery times have accelerated, allowing the company to deliver more items per route and increase efficiency. That helped net delivery cost per order improve nearly 40% in the U.S., EVP and CFO John David Rainey said.
- The retailer also improved its delivery speeds internationally during the quarter, according to McMillon. For example, same-day orders in India grew more than 150%, and one-hour delivery in China ballooned to 55 million orders.
Dive Insight:
Walmart's same-day and next-day volume over the past year compares favorably to a key competitor's recent results. Amazon said it delivered more than 4 billion U.S. units either the same day or next day in 2023.
The competitors took two different approaches to reach these towering numbers, as Juozas Kaziukėnas, founder and CEO of business intelligence firm Marketplace Pulse, noted on LinkedIn.
"Walmart uses stores, and store delivery is practically all of their same-day deliveries; Amazon doesn't have stores, so it is optimizing its fulfillment network," Kaziukėnas said.
Walmart’s more than 4,600 U.S. stores have helped the company meet online shopping demand efficiently without going through the expensive network adjustments that Amazon had to make.
Walmart has consistently slashed its store-to-home delivery costs in recent quarters by spreading those expenses over a growing customer base. It also began adding parcel stations to its stores last year to further improve last-mile efficiency.
"Delivery times are getting faster, and the cost of delivery is coming down at the same time," McMillon said.
