Retail giant Walmart Inc WMT responded to Amazon.com, Inc. AMZN's one-day shipping announcement with an offer of its own— a similar one-day shipping offer without an annual membership fee.
What Happened
Amazon last week said it will invest $800 million to offer paying Prime members one-day shipping. Shares of rival retailers fell Friday as Street analysts said Amazon's shipping initiative could be a "game changer" in the retail sector.
Walmart's response is short on detail as the retail giant teased its response in a tweet.
One-day free shipping...without a membership fee. Now THAT would be groundbreaking. Stay tuned.
— Walmart (@Walmart) April 26, 2019
Why It's Important
Walmart shouldn't experience any difficulties in matching Amazon's one-day shipping, Bloomberg quoted Sanford Bernstein Brandon Fletcher as saying in a research report. The analyst said one-day shipping is "neither shocking nor difficult" for Walmart given its large scale.
Fletcher has first-hand experience having worked in Walmart's strategy and operations department, Bloomberg said. Walmart boasts 156 distribution centers and upgrading its facilities to allow one-day shipping shouldn't require heavy investment
What's Next
Fletcher's report also highlighted a previous research report by consultants at A.T. Kearney, which said Walmart would need to add eight additional distribution facilities to offer one-day shipping to clients.
Walmart's stock closed Friday's session at $101.53 per share. Amazon closed at $1,950.63 per share.
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