Walmart is testing a free two-day delivery service for subscribers who pay $49 annually, another volley in an e-commerce war between the nation’s largest retailer and web superstore Amazon, whose $99-a-year Prime service offers the same delivery time.
The project, called ShippingPass, will rely in part on eight warehouses across the country, constructed specifically for e-commerce efforts, the Wall Street Journal reported. Regional shipping companies will handle the delivery services instead of FedEx, Walmart’s main shipping partner.
The rollout comes as Walmart grapples with sliding sales growth expectations and flat profit margins, even as Amazon and fellow e-retailer Jet expand services and capture a growing share of consumers. Walmart closed 269 stores earlier this year.
The trial follows a similar test of three-day shipping that Walmart offered last year to select subscribers, which included just 1 million of the company’s 7 million items for sale. Walmart’s online sales have been growing at a double-digit pace in the past year, amounting to $13.7 billion in 2015.
Making money on the program will be difficult, however. Walmart is playing catchup with Amazon, whose Prime service debuted over a decade ago. Amazon likely reaches more customers in a given geographical area per each shipment, industry consultant Ivan Hofmann told the WSJ.
To compete, Walmart will need to expand its e-commerce operation. “They will build density over time and become increasingly more competitive,” Hofmann told the WSJ.
Don’t expect to sign up just yet, however. Walmart said the program will be available by invitation only, starting Thursday.