Same-day delivery battles will intensify

October 22, 2012

Amazon picked the fight, and Walmart aims to end it. Supermarkets should know a lot more about the appeal and viability of same-day service by year’s end.

I want it now.

So goes the consumer theme driving same-day delivery tests by Walmart with United Parcel Service, trying to gain an edge over this holiday season.  Why not? Walmart is the retailer with the pricing clout and national presence to blunt the impact of Amazon, which continues to encroach in the sales of food and household goods (and much more).  

Walmart has also grown its U.S. e-commerce by nearly 20% to $4.9 billion in 2011, estimates Internet Retailer.

The same-day delivery battle this Christmas will center on CE, toys, sporting goods and other merchandise. But The Lempert Report thinks the lessons that emerge later in 2012 will be instructive for supermarkets eyeing food delivery as a way to retain share despite competition by online merchants.

The new Walmart program in northern Virginia, Philadelphia, Minneapolis, San Jose and San Francisco will use UPS drivers to pick up ordered general merchandise at Walmart stores in the area and deliver it to homes the same day for a $10 fee, reports The New York Times.  Walmart already delivers groceries the same day in San Jose and San Francisco, the account adds.

Amazon has brought a new wrinkle to the city by the bay—Amazon Lockers, located in supermarkets and other stores as a secure, convenient way for customers to receive packages when no one is home, according to the Los Angeles Times. On a broader scale, Amazon offers same-day local express delivery in Phoenix, Las Vegas and Seattle, for orders placed early enough in the day, the paper notes.

Not to be left out, FedEx offers what it calls SameDay cross-city delivery service within hours, seven days a week within 20 major U.S. metropolitan areas from coast to coast. And the U.S. Postal Service will trial Metro Post in San Francisco next month, delivering packages at night that are ordered online by mid-afternoon.

It may not be long before these major carriers, as well as regional alternative carriers, decide to apply their fleets to food deliveries too. They may present interesting options for supermarkets to bring new conveniences to customers at a reasonable fee. Another experienced player is UK-based Shutl, which connects physical stores with couriers and which UPS has invested in, according to BloombergBusinessweek.