Retailers speed up deliveries
Amazon, Target, Walmart all making heavy investment in retooling shipping systems
NEW YORK — Some of America’s biggest retailers are working to increase their shipping speeds to please shoppers expecting faster and faster deliveries.
Walmart, Target and Amazon are all in on the shipping wars, a move retail experts say will help them maintain a competitive edge against low-cost retailers Shein and Temu, which were founded in China. For Walmart and Target, their investments are also aimed at narrowing the gap in delivery speed with Amazon, which has set the standard for fast shipping and remains the king of speed.
Amazon packages have been arriving at the doors of Prime customers even faster this year under the company’s new distribution model, which divides the country into eight regions and predominantly ships items from warehouses in those areas. The idea, according to Amazon, is to get shipments to travel shorter distances with fewer touchpoints, which helps the company not only speed up deliveries but also cuts down on costs.
Previously, the Seattle-based e-commerce giant fulfilled orders from warehouses across the country. In July, it said 76% of customer orders were being fulfilled within their region, up from 62% before the change.
Company executives have noted faster shipping is also being driven by Amazon’s expansion of same-day delivery. Sameday delivery sites are smaller warehouses located in metro areas and predominantly store the top 100,000 products customers want. Amazon Vice President of Delivery Experience Sarah Mathew said the company currently has 55 of these sites in the country. And it has plans to double the number in the coming years.
To catch up, Walmart and Target have been pouring money into warehouse upgrades, new facilities or other efforts that they say will also help trim costs.
Walmart uses more than 4,000 of its stores as fulfillment centers and delivery hubs for online orders. In November, the company said it would be adding 40 so-called parcel stations to stores in nine states by year’s end to process more goods and get them faster to customers.
At the same time, the Bentonville, Arkansas-based company is working to overhaul its warehouses through automation to help speed up delivery to stores and customers.
The goal, Walmart says, is to double the number of customer orders fulfilled daily and expand next- and two-day shipping to nearly 90% of the US.
Meanwhile, Target is aiming to increase its shipping speed by augmenting its own warehouses, called sortation centers, with a $100 million investment announced earlier this year.
Sortation centers receive packages for online orders from 30 to 40 surrounding Target stores that are sorted, batched and routed for delivery to local neighborhoods by a third-party carrier or Shipt, which Target owns. The warehouses are expected to double their delivery volume to more than 50 million packages this year, with a growing number of items delivered to customers the next day.
The company — which currently has 10 around the country and plans a modest increase to at least 15 by early 2026 — said it expects to deliver 9 million packages from sortation centers during the holiday season.