Walmart Inc. has plans to expand the reach of its Delivery Unlimited service, which launched recently as a competitor to Instacart’s Express service, Target Corp.’s Shipt service and Amazon.com Inc.’s Prime Now service.
Walmart tested the service—which offers unlimited grocery deliveries for a $98 annual fee or a monthly $12.95 fee—earlier this year in Houston, Miami, Salt Lake City and Tampa. Walmart now plans to add the service to 1,400 additional stores in the 200 metro areas where it currently delivers groceries.
Walmart (No. 3 in the Internet Retailer 2019 Top 1000) says the expansion means Delivery Unlimited will be available in more than 1,600 stores and more than 50% of the U.S. population by the end of the year. Customers without a membership will continue to have the option of paying a per-delivery fee, which varies depending on the time window and size of the order. The Delivery Unlimited membership comes with a free 15-day trial.
So far, the Delivery Unlimited service includes groceries, consumables and some lighter general merchandise products. But that’s just the beginning, says Marc Lore, Walmart’s ecommerce CEO.
“We’re going to be expanding it to really have everything in the supercenter delivered same-day under the same membership. If we can do that and execute it really well, like we’ve done with pickup, I think that would be a reason to use Walmart,” Lore said during a Sept. 9 session at Recode’s Code Commerce conference held last week in New York City.
The program builds on Walmart’s existing Grocery Delivery service and its Grocery Pickup service. Grocery Pickup allows customers to order their groceries online and pick them up in stores without getting out of their cars. As of the end of its second fiscal quarter ended July 26, Walmart operated more than 1,100 grocery delivery locations and more than 2,700 pickup locations, according to a company report. Walmart says its grocery delivery program employs more than 45,000 personal shoppers.
At the Code Commerce conference, Lore acknowledged Walmart’s ecommerce operation is losing money. But he says the resulting tension between the profitable store operation and ecommerce business “is actually good, and it’s not unhealthy in any way.” He added that Walmart’s leadership is “aligned on the strategy going forward.”
Lore says Walmart has made great strides in improving delivery speeds and assortment in its ecommerce offerings. “But that’s not going to be how we win,” he said. “And so, the other part of the strategy is really thinking about how we play offense and leverage unique assets in a way only Walmart can.” That, he says, means finding new and better ways to leverage Walmart’s vast network of more than 4,700 stores, which puts the chain within 10 miles of 90% if the U.S. population. Offering same-day delivery of fresh and frozen groceries is one way to do that, he says.
The price of Delivery Unlimited is in line with a number of other services, including: Instacart Express, a $99 per-year service that lets shoppers receive groceries delivered for a flat fee (and for free when they spend at least $35); Target’s Shipt, a $99 per-year service (or $9.99 per-order service) that enables shoppers to receive same-day delivery from Target and other local grocers and stores; and Prime Now, Amazon’s two-hour delivery service that costs $7.99 per order. Amazon is No. 1 in the Top 1000 and Target ranks No. 16.
Ecommerce sales of food and consumables totaled $58.0 billion in 2018, an increase of 21.7% over 2017, according to just-released data from Inmar Analytics. Amazon’s 2018 sales in those categories totaled $21.1 billion, a 23.5% year-over-year increase, the report says.