Dive Brief:
- Walmart is now able to reach 93% of U.S. households with same-day delivery after expanding its stores' delivery reach in Q4, according to an earnings release Thursday.
- The announcement signals continued growth in the retailer's store-fulfilled delivery network. In October 2023, Walmart offered same-day delivery to more than 80% of the U.S. population.
- "If I could change anything about how we're perceived today, it'd be that more people know about our breadth of assortment online and our increasing delivery speed," CEO Doug McMillon said on an earnings call.
Dive Insight:
The expansion comes after Walmart grew the range of its stores' delivery coverage — or "catchment areas" — during the quarter, CFO and EVP John David Rainey said on the call. The company noted in January that its Spark delivery platform uses new geospatial technology that extended regular delivery to 12 million more households.
"These catchments are customized for each store using customer insights and external data – an approach that far outperforms traditional metrics such as zip code or distance from the store," Walmart said in a news release.
Walmart's expanding same-day delivery range comes in the thick of the retailer's fast shipping race with Amazon. Amazon reported earlier this month that it delivered more than 9 billion items either the same day or next day in 2024.
There's plenty of demand among consumers for fast delivery, according to Walmart executives. More than 30% of its orders involve customers paying a fee to receive a delivery in three hours or less, Rainey said. That percentage spiked on Christmas Eve, with 77% of orders calling for express delivery speeds, he added.
McMillon noted that having stores near customers is a big advantage for the retailer to satisfy consumers' shipping expectations, with locations "doing a great job of improving order quality and delivering with speed."
Walmart also reported a 20% reduction in U.S. net delivery cost per order in Q4, according to Rainey. Rainey attributed improving unit economics in delivery to spreading operational costs over more orders.
"Think of this as one of our drivers instead of delivering a package to one house on the street is now hitting four or five houses on that street," Rainey said.
