Wal-Mart is replacing a program that offered free shipping but had an annual fee with one that has a lower free shipping threshold and faster delivery as it hopes to answer Amazon’s powerful Prime membership success.
The retailer says it will reduce shipping time to two days on 2 million of its most popular items including essentials like diapers and pet food as well hot toys and Electronics. Wal-Mart’s average shipping time has been three to five days. Starting Tuesday morning, it’s also reducing the spending necessary for free shipping to $35 from $50.
Wal-Mart’s ShippingPass had allowed members to buy more than a million items for free shipping at Walmart.com. Last year, it trimmed its shipping time frame to two days from three, and it cut the annual fee by a dollar to $49. Bentonville, Arkansas-based Wal-Mart said the service worked well, but that it concluded shoppers shouldn’t have to pay a membership fee for free shipping.
The strategy shift is one of the first big moves by Walmart.com’s CEO Mark Lore, who joined the company when Wal-Mart bought online retailer Jet.com last year. And it’s an illustration of how Wal-Mart is trying to figure out a way to compete with Amazon and its dominant Prime plan.
Amazon’s membership program costs $99 a year, but includes services like streaming music and video that have created fierce loyalty. Analysts say Amazon Prime members buy more frequently and spend more money. Amazon doesn’t disclose a Prime subscriber total, but it’s estimated to be around 65 million. Wal-Mart wouldn’t say how many ShippingPass subscribers it had, but all will receive a refund of their membership fee.
Lore declined to comment on Amazon, but said lower prices, a wider assortment of eligible goods and faster shipping alone can build loyalty. Lore promised more moves ahead to spur Wal-Mart’s…
Source: Mobile Tech Today