Walmart is ready to take on AmazonFresh with its new Delivery Unlimited service. Last week the retail giant announced its new unlimited grocery delivery service, expected to roll out to 1,400 U.S. stores this fall. In exchange for a $98 per year or $12.95 per month membership fee, after a 15-day free trial, members of Delivery Unlimited will receive unlimited free grocery delivery. Non-members can still get grocery delivery from Walmart, but they will pay a delivery fee of $7.95 to $9.95 for each order.
Walmart initially tested the program in four markets – Houston, Miami, Salt Lake City and Tampa. It has since expanded to another 200 metropolitan areas across the country. It plans to grow to a total of 1,600 stores and 50% of the country by year end.
Grocery Delivery takes convenience to a new level, and our customers love it. With Delivery Unlimited, were providing incredible value for our customers and leveraging our unique assets to save them both time and money, said Janey Whiteside, Walmart chief customer officer, in a September 12 news release.
Similar to AmazonFresh, members book their delivery time slot online or in the Walmart Grocery app, fill their shopping cart with groceries from more than 100,000 available items, and confirm their order at checkout. The Arkansas Democrat Gazette reports that same-day delivery is available, but there is a four-hour minimum wait time and a minimum order of $30.
Walmart uses more than 45,000 personal shoppers to support this program. The shoppers are required to complete a three-week training program and how to choose the best items (e.g., freshest products, best cuts of meat, etc.) for their Online Grocery customers.
Weve been investing in our online grocery business by quickly expanding our Grocery Pickup and Delivery services. Delivery Unlimited is the next step in that journey, said Tom Ward, senior vice president, digital operations, Walmart U.S. By pairing our size and scale and these services were making Walmart the easiest place for to shop. Combine that with the value we can provide, our customers cant lose.
Walmart also offers a grocery pickup service in close to 3,000 of its stores. Customers shop online, select their groceries and then drive to Walmart to pick up their orders. The pickup service is expected to expand to an additional 100 stores by the end of the year.
Amazon offers a similar service, AmazonFresh, one of the forerunners of grocery delivery services. It is available as an add-on service, only available to Amazon Prime members. In addition to paying for a Prime membership of $119 per year, the monthly fee for AmazonFresh is $14.99 plus applicable taxes, after a 30-day free trial. There is a $35 minimum for free delivery.
Target offers a similar service via Shipt, which it acquired in December 2017. For a per-order delivery fee of $9.99, shoppers can have their Target orders – including groceries – delivered to their home. Instacart also offers a grocery delivery service for $3.99 per order, or using its Express membership, for $99 a year. A $35 per order minimum applies.
Big retailers are banking on consumers growing need for convenience. They know we have busy lives and they want to make them easier. In fact, they are counting on that. Walmart is having success with its grocery delivery service, so it is expanding in a big way this fall. Other companies like Shipt, Target and Instacart are on board. They must think Amazon knows what it is doing (hint: it does)! We expect to see more competitors enter the market and competitors like Amazon adjust their offerings. For example, we think Amazon will consider dropping its Prime membership requirement
Because the offerings including pricing and per-order minimums are similar, it will boil down to a few key differences when choosing a service, because it is unlikely that people will pay for more than one grocery delivery service: selection and execution. What products are available to customers? What delivery windows are available? How well does the company execute? Do they deliver on time at the right time? Are the selections fresh and as ordered? Do other restrictions (like a Prime membership) apply?