Walmart and Amazon are locked in a race to bring one-day shipping to the masses, and today Walmart hit a major milestone.
The retail giant said its NextDay shipping program launched in May now covers approximately 75 percent of the U.S. population. Walmart got to that milestone ahead of the original goal of the end of the year.
In its second quarter financial update today, Walmart didn’t disclose how much the company is spending on NextDay. Overall, the company’s operating expenses saw faster-year-over-year growth than revenue, an indication that Walmart is spending more.
Walmart CEO Doug McMillon said on a call with investors Thursday the NextDay program is helping to reduce shipping costs by reducing “split shipments and air freight.”
Amazon is in the midst of its own push to make one-day delivery its core shipping option, and while it hasn’t said how much of the population it covers, the tech giant has been upfront about the cost of the initiative. Amazon said it would spend $800 million in the second quarter alone on one-day shipping. A few months later, Amazon CFO Brian Olsavsky said the shift was costing more than expected due to “additional transition costs” such as adding inventory and moving it closer to the customer.
Walmart is relying on its massive network of stores to complement the one-day delivery push. More than 1,100 stores offer same-day grocery delivery, more than 2,700 stores offer the ability to order groceries online and pick them up in-store and 1,200 stores have pickup towers for online orders.
This fall, Walmart will begin testing a new in-home delivery program in Kansas City, Mo.; Pittsburgh, Pa.; and Vero Beach, Fla. The program relies on “smart entry technology” combined with proprietary cameras worn by delivery drivers that let customers watch while the workers load groceries into the refrigerator.
“Customers want options in how they receive goods, and we are the best positioned in the industry to provide choices through our omni-channel offering,” McMillon said in his prepared remarks.
In 2017, Amazon launched its own in-home delivery program. Key by Amazon pairs a cloud-powered security with a smart lock to let delivery drivers into homes to drop off packages. Earlier this year, Amazon expanded the program to allow garage deliveries.
Walmart reported earnings per share of $1.27 in the second quarter on total revenue of $130.4 billion, an increase of 1.9 percent over the prior year. Those figures beat analyst expectations, and Walmart stock rose more than 6 percent today.
President Trump weighed in on Walmart’s results after the market closed.
Walmart, a great indicator as to how the U.S. is doing, just released outstanding numbers. Our Country, unlike others, is doing great! Don’t let the Fake News convince you otherwise.
— Donald J. Trump (@realDonaldTrump) August 15, 2019