Wal-Mart tests same-day delivery for holidays

• Wal-Mart will test deliveries in select markets
• Tests have started in Virginia and Philadelphia
• Orders must be placed by 7 a.m. or noon, depending on location

NEW YORK — Wal-Mart is testing a same-day delivery service in select markets for customers who buy popular items online during the holiday shopping season.

The move comes as the world's largest retailer faces increasing competition from online giants such as Amazon.com, which is testing same-day delivery in 10 markets. Wal-Mart, based in Bentonville, Ark., is trying to cater to Web-savvy shoppers who are demanding more convenience.

Wal-Mart's tests started this month in Northern Virginia and Philadelphia. The program rolled out to Minneapolis on Tuesday. Wal-Mart plans to test the service in San Francisco and San Jose, Calif., later this month or early in November.

The program builds on a same-day grocery delivery launch in April 2010 in San Jose, followed by a test in San Francisco the past year.

About 5,000 general merchandise items, including flat-panel TVs, toys and Apple iPads, will be available for same-day shipping. The delivery charge is $10 for an unlimited number of items, with no minimum purchase. Shoppers in San Francisco and San Jose will be required to have a minimum order of $45.

"This builds on a testament to try to provide greater convenience to our customers," said Amy Lester, Wal-Mart spokeswoman. She said that right now, the company has no immediate plans to roll out the service to other stores.

"This is truly to learn and better understand what our customers want," Lester said.

In a recent Wal-Mart customer survey, the majority of respondents said they would consider same-day delivery if available, and more than half said they would use it monthly or more frequently.

Wal-Mart's service works this way: Customers place orders until noon and then choose a four-hour window to receive the delivery the same day. Wal-Mart is using UPS trucks to deliver the merchandise. For the San Francisco and San Jose markets, shoppers have to order by 7 a.m. and Wal-Mart is using its own trucks in those regions.

Amazon.com began testing same-day delivery service in 2009. The program is now available in 10 markets, including Chicago and Seattle.

Brian Sozzi, chief equities analyst at NBG Productions, said if Wal-Mart is able to blanket the same-day delivery service across the country and at the same time continue to open smaller stores, "that is a powerful model not only in the fight against Amazon, but also dollar stores."