Wal-Mart aims to one-up Amazon with same-day delivery

Wal-Mart is testing a same-day delivery service in a bid to outmaneuver Amazon in the increasingly cutthroat retail world.

The Bentonville, Ark., retail giant has been tested the service in Northern Virginia, Philadelphia, and Minneapolis. It will next expand to San Francisco and San Jose, Calif.

The service, called Wal-Mart To Go, is a trial run for the holidays that lets customers order specific items and gifts, which can then be sent to their homes or offices that same day. Orders have to be made by noon, and there is a charge of $10 with no minimum order requirement.

"It's part of our long-term vision to winning commerce," said a Wal-Mart representative. "We can do that by building deeper relationships with customers."

Wal-Mart didn't give an end date for the pilot program but said it would run through the holiday season.

The service underscores the lengths that the traditional retailers must go to as Amazon steadily gnaws away at their underlying business. Consumers who are more willing than ever to shop online have already helped kill off brick-and-mortar stores such as Borders and Circuit City and have put intense pressure on Best Buy.

The Wal-Mart representative said it was less about pressure from Amazon and more about serving its customers.

Wal-Mart hasn't felt the same pressure, largely because it provides so many different goods and has relatively competitive prices. That doesn't mean it's immune to the impact of online shopping, though.

The move essentially transforms Wal-Mart's chain of stores into warehouses for distribution to consumers. In effect, Wal-Mart is betting it can turn its wide -- but costly -- retail presence to its advantage in the home-delivery wars.

As a result, customers in those select areas have to create a separate Wal-Mart To Go account, where they will be given a specific list of items. Because Wal-Mart uses different stores to fulfill the orders, the items can vary depending on location. Wal-Mart is working with UPS to ship the orders, which will be delivered between 4 p.m. and 10 p.m. that day.

Wal-Mart has been testing same-day delivery grocery services in San Francisco and San Jose for the past two years, and next month, Wal-Mart will bring merchandise to those cities as well. But unlike the four other markets, the orders have to be made by 7 a.m. and there is a $45 minimum order, inline with its existing program.

Amazon is believed to be thinking about offering same-day delivery, particularly as it widens its distribution capabilities, and has been testing the service in select cities and periods for the past two years.

Over the summer, however, Amazon downplayed the idea, saying it was too difficult to expand the service in an economically viable way, according to AllThingsD.

Online auction service eBay, meanwhile, said it was testing a same-day service called eBay now.

Updated at 1:54 p.m. PT: to include additional information and a comment from Wal-Mart.