In a move to capture even more customers, and compete more directly with Amazon.com, Wal-Mart is beginning to test a Same-Day Delivery option for online shoppers. The goal is to make virtually all of Wal-Mart's products available to customers who order online within 4 hours at their doorstep (via UPS). This change in Wal-Mart represents not only a competitive threat to outside businesses, such as Amazon.com, but also an expansion in Wal-Mart's vertical and horizontal organizational boundaries.
Wal-Mart can claim its vertical boundary expansion to the fact that this new service continues to move Wal-Mart's activities closer to the consumer. While Wal-Mart has utilized its online presence to offer shopping, shipping and even ship-to-store options for customers it is now testing expanded user options. No longer do people have to check the famed "People of Wal-Mart" website to see if they got caught shopping in their pajamas or underwear, they can now shop within the privacy of their homes and still get the product the same day. The ability to receive a product the same day with even less effort expended on the customers behalf may even increase the purchase of impulse items.
The horizontal boundaries of Wal-Mart will also expand through the scale of their operations and with the potential to later include a scope expansion as well. Currently, Wal-Mart customers enjoy the options of shopping in the retail store, regular shipping from the online site and the widely used ship-to-store option. By adding direct same-day shipping to your home Wal-Mart can expedite the time it takes to receive their goods and products. While Amazon.com has offered two-day shipping and very limited same-day, this Wal-Mart option evolves their already "Super Centers" into mini-distribution centers as well.
Same-day shipping is currently offered with limited products and in few locations. If the test goes well Wal-Mart expects to add same-day options to its 4,000 national retail locations. In addition to more stores offering same-day they will also offer more products in the same-day shipping extending the scope.
As a much larger provider of goods Wal-Mart has a competitive advantage over Amazon.com. Wal-Mart has the buying power to keep prices low and continually drive them lower and with its numerous retail locations Wal-Mart has the ability to distribute products same-day more efficiently. Although the details are not fully published this same-day shipping will be delivered through UPS. Wal-Mart also has the ability to forecast demand for same-day by using their already established ship-to-store order histories.
Only time will tell if the test is a success and Wal-Mart rolls out same-day shipping on a large scale or if the costs and logistics prove to be too much for Wal-Mart to manage. Regardless of the results it does show that even a retail super-giant such as Wal-Mart can continually evolve and extend both its vertical and horizontal boundaries.