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The future of retail is arriving faster than ever — and it’s increasingly showing up in a Walmart shopping bag.
The retail giant’s US CEO John Furner said Tuesday that the company’s quickest delivery speed this year clocked in at under five minutes.
“We’re looking at the entire footprint and ensuring that we are prepared to deliver customers really flexibly any way they want,” he said at the Fortune Brainstorm Tech conference in Park City, Utah.
On Walmart’s earnings call last month, CFO John Rainey said the company is now routinely delivering orders to shoppers in less than 30 minutes.
Rainey said a third of the company’s ship-from-store orders were fulfilled in three hours or less, and a fifth of those orders reached customers in 30 minutes or less. That works out to one in fifteen orders fulfilled from the store arriving in less than half an hour
Earlier on Tuesday at the Goldman Sachs Communacopia conference, Walmart’s head of US e-commerce, David Guggina, said this focus on ultra-fast delivery was one of the things he’s most excited about.
“We are going to make more and more items faster for our customers,” he said. “Three-day will turn into two-day, two-day into next-day, next-day into the same-day, same-day into sub-same-day. And more and more items will be offered at ultra-fast speeds in minutes. So that’s incredibly exciting.”
Until this year, Guggina’s career has focused on manufacturing and supply chains. Walmart’s deep investment in stores and distribution centers across the US is giving the company a leg up on competitors, namely Amazon.
“Obviously, Walmart’s a retailer, but we’re also a forward-deployed fulfillment network with 4,700 assets across the US,” he said.
And while the typical supercenter carries around 120,000 different items, Guggina said the product mix is tailored to the demands of the local market area.
“It’s millions of items when you look at it across the whole US,” he said. “That gives us great capabilities when it comes to speed.”
It also helps that these 4,700 stores put the company within reach of 94% of the US population within three hours — a number that execs expect to hit 95% by the end of the year.
What’s in it for Walmart?
Well, for starters, this ultrafast service isn’t free. It typically requires a paid membership or an additional fee to unlock the quickest delivery times. Membership income can be a highly profitable revenue stream, including for items sold at a lower markup.
Plus, Guggina said that fast delivery shoppers buy more stuff than regular e-commerce shoppers do, with ultra-fast basket sizes around 13% larger than regularly scheduled orders.
Fast delivery shoppers also spend twice as much as the average digital customer, he said. That figure jumps to three times as much when shoppers use fast delivery four or more times.
“We’re going to continue to lean into this space,” he said.
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