US retail giant Walmart has chalked out a new plan to check-mate Amazon free two-day guaranteed shipping for purchases worth $35 or more. This it hopes will provide the company with enough leverage to counter Amazon Prime service that enjoys huge popularity in the United States.
The Amazon Prime program offers free shipping to anywhere in the United States but charges a $99 annual subscription fee. There are other goodies thrown in to make the offer even more lucrative, like access to Amazon’s music and video streaming services.
Of course, Walmart won’t have any of such but hopes waiving off the shipping charges will allow it to grab a bigger slice of the US retail pie. The offer covers over two million of the most sought after products which include household supplies, baby products, cleaning material or some select food items. Amazon though has no minimum price ceiling to qualify for free shipping for Prime subscribers.
Slashing of shipping charges is the most drastic decision taken by Walmart in recent times to boost its online presence. It had earlier introduced Shipping Pass membership in 2015 that charged an annual fee of $49 for free two-day shipping. The company stated the fee amount will be reimbursed to all the members soon.
Marc Lore who is in charge of Walmart’s e-commerce division exuded confidence they will finally be able to narrow down the gap with Amazon with the new offer. Lore had stated in October last they will double their existing large warehouse count to ten by end-2016 to ensure they are able to deliver most of the products within a day itself.
Walmart is desperate to emerge as a dominant player in the U.S. e-commerce segment to pose a credible challenge to Amazon whose Prime membership currently boasts of over 65 million subscribers. It has only been this past year that Walmart acquired Jet.com in a deal worth over $3 billion. Lore has since then been heading Walmart’s online business and has also made wide-ranging changes in the management team this month.
All of the efforts seem to be paying off as well with Lore claiming they are witnessing strong growth already. He, however, stated there would more changes introduced to maintain the growth momentum.