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Walmart tests two-day shipping service to rival Amazon Prime

RBR Staff Writer Published 13 May 2016

Retailing major Walmart is testing two-day shipping subscription service and plans to set up a region network in a bid to compete with Amazon’s Prime.

walmart fulfillment center

The retailer plans to build eight large e-commerce warehouses around the US by the end of this year as part of its plans.

The $2bn project is aimed at improving technology and logistics to increase online sales, The Wall Street Journal reported.

Walmart is also planning to rival Amazon with its large transportation fleet and logistics expertise.

It wants to make use of regional delivery companies to boost its package deliveries, in addition to its 6,000 tractor-trailers. The move could lessen the Walmart's parcels handled by FedEx.

It also wants to divert the investments to e-commerce space, as online shopping gains momentum. Earlier this year, the retailer shut down over 150 store in the US to generate funds for investments in online offerings.

Walmart has been investing large amounts in a program which enables its customers with a curbside pickup of groceries ordered online at its stores.

In 2015, Walmart had tested a three-day shipping service for members paying $50 per year. The program called ShippingPass was similar to Amazon's Prime which offers two-day shipping service.

A Walmart spokesman told the publication that ShippingPass members will get free two-day shipping for $49 a year from 12 May. He did not disclose the number of enrolled members for the service which is available only by invitation.

Standard delivery of products ordered on the Walmart's online platform usually takes nearly a week. It levies shipping charges for orders less than $50.

The retailer is also looking to partner with regional delivery companies in order to achieve the two-day shipping program and reduce overall delivery times.

Usually, these firms ship only within select states and charge rates that are a third lower than those of national carriers like FedEx and United Parcel Service.

Since 2014, Wal-Mart has invested billions into strengthening its supply chain and technology to bolster online sales, which rose 12% to $13.7bn in the fiscal year ended 31 January.

However, despite the investment, Wal-Mart's global e-commerce sales were sluggish in every quarter of last fiscal year.

Image: Walmart planning to relocate more inventory to eight large e-commerce warehouses around the US. Photo: Courtesy of Wal-Mart Stores, Inc.