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Walmart is investing $2 billion in its own version of Amazon Prime

Watch out Amazon.


AJ Dellinger


Posted on May 16, 2016   Updated on May 26, 2021, 6:41 pm CDT

Amazon’s two-day shipping is responsible for siphoning off foot traffic from big-box stores, but now the biggest box of them all is aiming to steal back some of that business. Walmart is testing a two-day shipping subscription service of its own to compete with Amazon Prime.The Wall Street Journal reports that Walmart is investing $2 billion into its two-day shipping initiative, which focuses on building out a regional delivery network. The process will shift a considerable amount of inventory into eight massive warehouses located around the United States, set to be completed by the end of the year.

Walmart’s bet is that it can compete with Amazon at its own game by leveraging Walmart’s existing infrastructure. There are over 4,600 brick-and-mortar Walmart locations around the U.S., and the company possesses one of the largest private trucking fleets in the country, with 6,000 tractor trailers at its disposal.

According to sources who spoke with the Wall Street Journal, Walmart plans to tap more regional carriers to help with deliveries and to become less reliant on FedEx, the company that currently handles the majority of Walmart packages.

The decision to compete with Amazon head-on is an aggressive but necessary move for Walmart. The company that was once synonymous with low prices has been surpassed in market value by its online competitor. Amazon jumped Walmart last year to become the world’s largest retailer by market value.

Earlier this year, Walmart announced that it would be closing 150 stores in the U.S., primarily in an effort to reallocate funds to invest in its online presence. Last year, the retailer began experimenting with a three-day shipping plan that cost $50 per year—about half the price of Amazon Prime.

It’s hard to say whether Walmart’s new focus on e-commerce will be too little, too late; it’s not like Amazon has been short on challengers in the space, and it still manages to beat expectations. One thing is for sure, though: Walmart still has the finest selection of caskets the Internet has to offer.

H/T Wall Street Journal

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*First Published: May 16, 2016, 8:21 pm CDT