Dive Brief:
- Walmart dropped the $35 minimum purchase requirement for its two-hour Express delivery service, which the retail giant launched last May.
- Delivery through Express now requires $10 on top of existing delivery charges. The retailer's Walmart+ subscription, which also launched last year, drops the second delivery fee.
- "Customers told us sometimes the items they needed in a hurry didn’t meet the minimum, so we’re removing it, making it even easier for customers to get what they need when they need it," Tom Ward, senior vice president of customer product, said in a press release.
Dive Insight:
Walmart ramped up the development of its two-hour delivery service last year as customers avoided stores in a consumer environment shaped by the COVID-19 pandemic.
Today the service is available at almost 3,000 Walmart stores and deploys a team of 170,000 personal shoppers to pick customers' orders. Included in Express are food, consumables and general merchandise. Ward said that customers lean on the service "when they're in a pinch," such as missing a dinner ingredient or in need of a household necessity like diapers.
As e-commerce demand took off during the pandemic, grocers like FreshDirect and Hy-Vee also added "express" services that charge a premium for faster fulfillment.
Walmart's rapid service rivals Amazon's Prime Now rapid delivery, which has been a weapon in the e-commerce giant's arsenal for years now. At the time Walmart launched Express, Moody's senior retail analyst Charlie O'Shea described it as part of an "arms race" in delivery speed between Amazon and Walmart.
Another major salvo in that race was Walmart+, which comes with a $98 a year fee and gets subscribers free next-day and two-day shipping. In December, Walmart dropped the minimum purchase requirements on Walmart+ orders as well (but not for groceries and some other items).
Walmart+ gives Walmart a Prime-like loyalty program based around shipping, though it doesn't come with the extensive exclusive media offering of Prime Video and some of the other goodies attached to Amazon's membership. Even so, Walmart+ has gained potentially more than 8 million subscribers since officially launching last fall, according to a Consumer Intelligence Research Partners analysis.
The company has rapidly built up its ranks of e-commerce shoppers to meet elevated demand for grocery and other items. Walmart is also scaling up automated micro-fulfillment centers — or "local fulfillment centers," as it refers to them — that can further support rapid delivery and pickup.
