On Wednesday, the world's largest retailer started allowing customers making online purchases on an initial 10,000 items to either take advantage of its free, two-day home shipping option or have it sent to a local Walmart store, at a discounted price.
Pickup discounts vary by item. For example, the price of a Britax B-SAFE 35 Infant Car Seat, Slate Strie at $148.05 will have an additional discount for pickup of $7.40.
The discount option will roll out to an additional 1 million popular items by the end of June.
"We are at a point right now where we are really able to leverage the assets that are unique to Walmart," Marc Lore, president and CEO of Walmart eCommerce U.S. told TheStreet in an interview.
Walmart's discounts could prove quite disruptive to Amazon.
"We analyzed the price impact across 400 plus of Walmart's stock-keeping units (SKUs) tied into the move and found an average 3.5% discount, with bulkier/heavier-item categories exhibiting a tendency to have higher discounts," KeyBanc Capital Markets analyst Ed Yruma wrote in a new on Thursday. "Amazon is likely to remain price competitive with Walmart initially, though we expect a margin headwind as Walmart's item list expands. Longer term, Amazon could respond by increasing its reliance on physical stores."
Walmart touts its pickup discount as another way it is being more transparent with its pricing, as it costs less for the company to ship items to one of its stores compared to a home. The new option is the direct result of Walmart's $3.3 billion acquisition of e-commerce company Jet.com last year, as it mirrors Jet's Smart Cart feature that guides customers through various ways they can alter their purchases to reduce prices.
The August 2016 acquisition of Jet.com has proved to be possibly Walmart's smartest buy to date. Lore, who founded Jet.com and now leads Walmart's U.S. e-commerce business, has mounted a serious charge against Amazon by aggressively acquiring e-commerce retailers and launching new services.
Here's what Lore had to say about Walmart's newest e-commerce initiative and overall online business. What follows is an edited and condensed version of our discussion.
Editor's Pick: Originally published April 19.