The Home Depot announced Tuesday the nationwide rollout of Express Delivery, expanding the service by using more than 2,300 stores as local fulfillment centers for both professional contractors and do-it-yourself customers.

Express delivery had previously been available only in select markets. The home improvement retailer said nearly every item in its stores can be delivered in three hours or less for a small flat fee, with no subscription or membership required, and it expects to add even faster delivery speeds in the months ahead. That flat-fee, no-membership structure sets it apart from Amazon and Walmart, which tie many of their fastest delivery options to paid subscriptions such as Prime and Walmart+.

“The majority of those deliveries are actually happening in less than one hour,” said Jordan Broggi, executive vice president of customer experience and president of online, during a conference call with analysts held to discuss the company’s second-quarter results.

Home Depot (NYSE: HD) promotes itself as the fastest fulfillment home improvement brand. The announcement comes as many retailers increasingly offer fast delivery from stores, relying on app-connected freelance drivers to make deliveries and give customers an extra level of convenience. E-commerce experts say the ability to offer fast delivery allows retailers to convert many shoppers into buyers. Those expectations have been shaped in large part by Amazon’s Prime program and by Walmart’s push to fulfill online orders from its U.S. stores, raising the bar for large retailers across categories.

The competitive landscape has been shifting quickly. Bookstore Barnes & Noble, Carter’s and Kohl’s on Tuesday announced they were making their products available on the DoorDash marketplace, which becomes another sales channel and a way to instantly book a delivery. In the spring, DoorDash expanded its presence in the apparel sector through partnerships with Urban Outfitters, Dolce Vita, Rally House and Steve Madden. In May, DoorDash began offering last-mile delivery for Dollar Tree at more than 9,000 stores. DoorDash now has tens of thousands of national retail stores connected to its marketplace and recently signed with Shopify to offer delivery for small retailers. In April, Ace Hardware picked Uber Eats to handle last-mile delivery from its stores.

“Home Depot is well positioned to make three-hour delivery work because it has more than 2,000 stores and customers who often need products immediately. For a contractor, one missing tool or part can stop a job. In that situation, the delivery fee matters less than getting the order to the job site quickly,” said Owen Carr, chief merchandising officer at Spreetail, a seller on major online marketplaces. That immediacy carries particular weight for Home Depot’s business: the company has said professional customers account for roughly half of its sales.

“We see an average 12.5% sales lift for every day removed from the delivery window, so there is a clear sales opportunity for Home Depot. The question is how much new demand Express Delivery creates versus how many customers simply move from store pickup or standard delivery to a faster option,” Carr added.

The trend of in-store fulfillment has broader implications for the parcel industry: it diminishes demand for network carriers like FedEx and UPS, which are cutting back on low-margin B2C parcel delivery to focus on more profitable customers.

“Customers expect products to be available when and where they need them, and Express Delivery helps us meet that expectation with a fast, reliable solution,” said Jordan Broggi, executive vice president of Interconnected Retail, in a news release. “Whether you’re a DIYer who needs one more bag of fertilizer to finish the yard or a Pro running short on adhesives and caulk for a time-sensitive job, Express Delivery makes it easier than ever for our customers to get the supplies they need, right when they need them most.”

Carr said express delivery won’t be easy for Home Depot to achieve. “Fast delivery of bulkier items is one of the toughest logistical feats in retail. Home Depot has to know the product is actually on the shelf, pick it quickly and get it to the customer without making the order unprofitable. If it can execute that consistently across 2,000 stores, Express Delivery could become a meaningful advantage in both its Pro business and its competition with Amazon and Walmart,” he said.

Beyond the new service, Home Depot has been steadily expanding its delivery capabilities. Free same-day delivery is available for orders of $25 or more placed before 4 p.m. The company can also deliver thousands of items, such as lighting and building materials, as quickly as the same day from its network of delivery centers. Over the last 18 months, Home Depot has reduced delivery lead times by about 45% in the U.S. Two-thirds of in-stock parcel orders arrive same-day or next-day, and 55% of big-and-bulky items arrive within two days.

Home Depot also stocks a select assortment of appliances that can reach customers the next day in many markets, accommodating demand for direct purchases with changes to its supply chain. The retailer is using automation to speed product flow at its fulfillment centers and meet same-day and next-day commitments.

“Delivering the best interconnected experience is a key component of our strategy, and our faster delivery speeds are resonating with customers and driving greater engagement,” said Billy Basteck, executive vice president of merchandising, on the call with analysts. “Going forward, we will continue to further optimize fulfillment across all of our assets.”

As a result of its investments, Home Depot says it is now able to provide next-day delivery coverage on key SKUs to nearly 60% of the population.

The company also reported second-quarter results. Net income was $4.8 billion, up from $4.6 billion in the prior-year period. Adjusted diluted earnings were $4.92 per share versus $4.68, while revenue rose 5.7% to $47.9 billion.

Management said Home Depot received $730 million in tariff refunds at the end of June from the U.S. government for duties the Supreme Court ruled were not allowed under the Constitution, with about $685 million offsetting costs during the second quarter.

Source: FreightWaves