Walmart is killing off its Amazon Prime competitor in favor of offering free shipping on more items. The old service, named ShippingPass, started trials nearly two years ago, charging a $49 annual membership in exchange for free two-day shipping. The new system means that this service will be available on more than 2 million items to any customer, although there is a minimum purchase price of $35 (previously $50).
Free two-day shipping will be available on a number of common items, including “baby necessities, pet products, food, like cereal and peanut butter, cleaning supplies and beauty favorites.” Walmart also offers same-day pickup on items in some 4,600 stores, and online grocery pickup at 600 locations.
In a press statement, Marc Lore, head of Walmart’s e-commerce division described free two-day shipping as “table stakes” for online retailers, telling reporters he hoped the move would “build loyalty.” However, it’s not clear if Walmart’s offer will be preferred by customers.
Although the change means free two-day shipping on many items without a membership fee, customers may still prefer paying Amazon $99 a year for additional benefits. Prime includes two-day free shipping without a minimum order price, free one-day deliver if available, and access to the likes of Amazon Video — the company’s Netflix competitor. Although the exact number of Prime members isn’t known, estimates suggest more than half of US Amazon members are already signed up.
Whether or not Walmart’s change will help it compete with Amazon in the e-commerce space isn’t clear, but the move shows how Jeff Bezos’ company has redefined expectations for online shopping. If free two-day shipping is now “table stakes,” what else can be offered to sweeten the pot?
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