What: Walmart has successfully reduced the cost of its last-mile delivery from stores to customers' homes by approximately 20% over the past year.

Why it is important: This significant cost reduction is crucial for Walmart as it enhances the efficiency of its e-commerce operations, making the delivery process more sustainable and competitive. By lowering delivery costs, Walmart can offer better services to its customers, potentially increase its market share among upper-income households, and attract more members to its Walmart+ service.

Walmart's Executive Vice President and Chief Financial Officer, John David Rainey, announced on an earnings call that the company has managed to lower its last-mile delivery costs by about 20% from the previous year. This improvement is attributed to an increase in e-commerce customers and a more dense delivery route, allowing the company to distribute delivery costs across multiple orders. The retail giant has seen a 50% increase in store-fulfilled delivery sales in the fourth quarter, reaching a USD 2 billion monthly run rate in this category. Walmart has also introduced parcel stations in its stores to streamline the delivery process and plans to further enhance efficiency by implementing automation technology in its fulfillment centers. This strategic approach not only improves Walmart's delivery unit economics but also positions the company for continued growth in the competitive e-commerce space.

Walmart trims store-to-home delivery costs by 20%