Wal-Mart (NYSE: WMT) made its name by being a cheap alternative in the big-box retail space. Now it’s bringing that same concept to online delivery.
This holiday season the nation’s No. 1 retailer plans to offer same-day delivery services in select cities for orders placed on the company’s website. The move is viewed as a shot across the bow of Amazon (NASDAQ: AMZN), which currently dominates the online retail realm.
Wal-Mart shares surged 1.75% today after the announcement. Amazon shares slipped 2.4%.
Amazon executives shouldn’t exactly be shaking in their boots just yet. Wal-Mart’s delivery program, called Wal-Mart To Go, will only be offered in a handful of major cities. The company launched the service last week in Philadelphia and northern Virginia. Other cities will soon follow, but the program will only last through the holidays.
Still, if successful, Wal-Mart To Go could pose a threat to Amazon’s online delivery dominance. The program is more efficient than Amazon’s, with products being delivered straight from the company’s stores within a day. With more than 10,000 stores across 27 countries, Wal-Mart is one of the few companies equipped to pull off such a stunt.
Wal-Mart To Go isn’t going to put Amazon out of business overnight. But the seed for a little healthy competition has been planted.