Wal-Mart Tests Same-Day Delivery

Wal-Mart said Tuesday it had begun testing same-day delivery for online purchases in a handful of cities across the country.

The near-instant delivery is possible because the merchandise is being shipped from Walmart stores.

The first retailer to master same-day delivery on a wide scale could attract customers who have avoided online purchases because they wanted items immediately, and encourage current shoppers to add products that they usually buy from supermarkets or drugstores, including celery and toothpaste.

But some retail analysts are questioning whether the expense and difficulty of same-day delivery would be worth it.

Amazon is the world’s largest online retailer, and in an interview last month, Jeff Bezos, its chief executive, said that the company was striving for same-day delivery in metropolitan areas. Its Web site says same-day delivery is available in limited cases. Mr. Bezos said Amazon would soon be able to cut as much as a day off its shipping times, raising the possibility of same-day delivery in cities where it has distribution centers.

If Wal-Mart expanded its same-day shipping across the country, it could essentially transform the more than 4,000 Walmarts, along with Sam’s Club and other divisions, into distribution centers. Amazon, by contrast, had fewer than 40 distribution centers in the United States at the end of last year and has plans to add about 20 worldwide this year.

“Everybody in retail is terrified of Amazon, and they’re terrified of losing more wallet share to Amazon,” said Sucharita Mulpuru, an analyst with Forrester Research. The Wal-Mart move is “to try to get ahead of the curve if Amazon does introduce something like this.”

Wal-Mart and Amazon once operated in separate spheres — Wal-Mart’s offline, Amazon’s online. And Amazon’s sales, at $48 billion in 2011, are more than a tenth of Wal-Mart’s, which were $419 billion in 2011. But increasingly, they are competing for the same customer and the same turf.

For instance, in a move that probably hurt Wal-Mart, Amazon last year offered customers a discount on items they scanned in physical stores, letting it pluck shoppers as they strolled the aisles of stores like Walmart. And its subscription Prime service, offering free two-day delivery on many items, has gotten customers buying staples like toilet paper from it rather than from nearby groceries and Walmarts.

Wal-Mart, meanwhile, has been building up its e-commerce site as it tries to do things that Amazon cannot, such as allowing customers to pay for online purchases with cash. “Connecting our Web site to our stores gives us a unique advantage, so customers can shop anytime, anywhere,” said Amy Lester, a Wal-Mart spokeswoman.

Both retailers have the same goal: to be the general store where customers will buy apparel, food, home décor and just about everything else, no matter how they want to order and receive the goods.

Yet same-day delivery may not make financial sense, Ms. Mulpuru said. “If you don’t care about losing a lot of money, sure, you can pull this off,” she said. “The question is: Can you pull this off profitably? I’m not convinced.”

She pointed to retailers that already offer same-day delivery in some areas, like Barnes & Noble, and said that the service had not been a game-changer. People who live in dense urban areas and who do not have cars might find same-day delivery useful, but for those in suburban or rural areas a short drive to a Walmart is easier than waiting for a delivery, she said.

Physical retailers have been trying to figure out how to turn their stores into competitive advantages. With staff, inventory and real estate, stores have many costs that online retailers do not have. Wal-Mart and a few others have started using the stores to offer services to online shoppers, including shipping items (but not same-day), free returns, ordering online and picking up in a store and payment centers. However, few offline retailers offer same-day delivery. They rarely have enough locations to make it feasible, and there are logistical hurdles.

The Wal-Mart tests, the first of which started last week in the Washington suburbs, let customers order toys and other popular gifts, and have them delivered to their homes the same day. Ms. Lester, the Wal-Mart spokeswoman, said the company chose which items to include based on what was popular in its order-online, pick-up-in-store service. The same-day service costs $10, with no minimum purchase.

Wal-Mart has been testing same-day grocery delivery for more than two years in San Jose, Calif., and now offers it in San Francisco, too. But this is the first time it is trying to ship general merchandise within a day.

To receive goods on the same day, consumers must place an order before noon, and select a four-hour window when they want the items delivered. United Parcel Service is handling deliveries. The current test includes toys, sports equipment, home décor and electronics — all popular holiday items.

Amazon has offered limited items, in limited areas, for same-day delivery since 2009, its Web site says. Its Prime service, which costs $79 a year, is popular. “Prime members buy at a faster rate in all categories,” Mr. Bezos said this year. “One of the big advantages of Amazon for consumers is that they can get one box with a lot of things in it from different categories.”

The Wal-Mart program is already running in Northern Virginia and Philadelphia. It was introduced Tuesday in Minneapolis, and the San Jose and San Francisco areas that are already part of the grocery test will join the toys-and-gifts test this fall.

“This is definitely a holiday test, but we don’t have an end date at this point,” Ms. Lester said. An Amazon spokesman declined to comment.