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Wal-Mart Stores Inc. is testing a two-day shipping subscription service and building a regional delivery network, in the boldest attempt yet by a major traditional retailer to compete head-on with Amazon Prime.

As part of the project, Wal-Mart, the world's biggest retailer, will shift more inventory to eight massive e-commerce warehouses around the U.S., the last of which will be built by year's end. It is part of a $2 billion investment the company is making in technology and logistics to boost e-commerce sales.

The company will also put its major transportation fleet and logistics know-how up against Amazon.com Inc. as it makes a play to meet Amazon on its own turf. Wal-Mart will tap regional carriers to deliver more of its packages, according to people familiar with the project. But it will also use its 6,000 tractor-trailers, one of the largest private trucking fleets in the country, along with its 4,600 U.S. stores, to take on what has become one of its biggest rivals.

That could make Wal-Mart less reliant on FedEx Corp., which handles the bulk of Wal-Mart's parcels. FedEx declined to comment.

As more shopping shifts online, Wal-Mart is reallocating capital. Earlier this year it closed more than 150 U.S. stores, in part to free up resources to invest in its e-commerce offerings. It has been investing heavily in a program that lets people order groceries or household goods on its website for curbside pickup at stores, a program executives have touted as a key way to compete with online-only retailers.

Meanwhile, Amazon has been expanding into new categories like groceries and fashion, and raising consumer expectations for ever faster delivery to their homes. It uses its $99-a-year Prime program to keep shoppers loyal by linking more benefits to membership, like access to movie streaming and discounts. Analysts estimate Prime has signed up more than 50 million members world-wide and that such customers spend about twice as much money on Amazon.com a year than non-Prime customers.

Last year Wal-Mart began experimenting with a three-day shipping service for members who pay $50 a year. The program, called "ShippingPass," is similar to Prime, which provides free two-day shipping.

In February, Wal-Mart invited several regional carriers to a conference in Atlanta where it outlined its vision of building a network of regional delivery companies and solicited bids, according to the people familiar with the plans. Wal-Mart wooed the carriers with promises of steady streams of package volume and a strategic partnership, these people said.

At the conference, Wal-Mart told attendees it planned to use its sprawling transportation network to conquer e-commerce. Trucking more of its own packages closer to the shipping destinations for what's known as last-mile delivery would allow the company to save on one of the higher-cost elements of shipping a package across the country.

"It's a big initiative to drive their e-commerce business," including heavy investments, said one of the attendees. "I know they're very serious about this."

Starting Thursday, ShippingPass members will get free two-day shipping for $49 a year, said a Wal-Mart spokesman. He declined to say how many people have signed up for the service, which is only available by invitation. Standard delivery on Walmart.com can take around a week and the company typically charges for shipping orders less than $50.

Other retailers have tried to answer Amazon's aggressive expansion. Target Corp., for example, gives free shipping to customers who pay with its loyalty credit or debit cards, while online retailer Overstock.com Inc. has a $20-a-year free shipping program. Others chains, including Toys "R" Us Inc., Saks Fifth Avenue and Staples Inc., have teamed up with ShopRunner Inc., a $79-a-year service that offers free two-day shipping from dozens of merchants. EBay Inc., too, is experimenting with an unlimited two-day shipping program in Germany.

But Wal-Mart has one of the best chances to truly take on and compete with Amazon, said Ivan Hofmann, a former FedEx executive and transportation industry consultant. "They know transportation better than people realize," said Mr. Hofmann. "It's a core strength of Wal-Mart."

Its truck fleet is one of the five largest private fleets in the country, according to Satish Jindel, president of industry tracker ShipMatrix. And a large part of Wal-Mart's success is its ability to move all those products cheaply and efficiently around the country.

To achieve the two-day shipping window and shorten delivery times generally, Wal-Mart is, in part, looking to regional delivery companies. These firms typically ship only within a handful of states and can charge rates as much as a third lower than those of national carriers like FedEx and United Parcel Service Inc.

Since 2014, Wal-Mart has poured billions into beefing up its supply chain and technology to increase online sales, which increased 12% to $13.7 billion for the fiscal year ended Jan. 31. Despite the investment, Wal-Mart's global e-commerce sales slowed each quarter of last fiscal year. Executives said weak international results were partially to blame. Amazon, meanwhile, clocked a 17.5% increase to $99.1 billion in online and electronic-device sales in 2015.

E-commerce has turned out to be more expensive than many retailers expected. They still struggle to make a profit shipping low-cost items such as tubes of toothpaste, boxes of pasta or socks to people's homes.

Amazon sends out about seven times the number of packages Wal-Mart does in North America, according to ShipMatrix estimates. That means Amazon will almost always get better rates than Wal-Mart with delivery companies. Amazon is already a major customer of the regional delivery companies that Wal-Mart plans to use more frequently.

Currently, Wal-Mart's e-commerce operation relies on more than 150 distribution centers that help serve the eight large e-commerce fulfillment centers. Over 80 of its U.S. stores are set up to act as delivery hubs.

Greg Bensinger

Write to Laura Stevens at laura.stevens@wsj.com and Sarah Nassauer at sarah.nassauer@wsj.com

(END) Dow Jones Newswires

May 12, 2016 20:05 ET (00:05 GMT)

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