The battle for market domination between Amazon and Walmart is heating up as the two retail giants go head to head on shipping fees and speeds. Last month, in a bold move to compete with Amazon, Walmart announced that it would offer free two-day shipping for all its online customers on two million of its most popular items. The retailer also dropped the order threshold to qualify for free shipping from $50 to $35.
Amazon countered swiftly, dropping its order minimum from $50 to $35 for its non-Prime members. Amazon’s very successful Amazon Prime offers free two-day shipping to members with no minimum order amount, in addition to streaming movies and music, for a $99 annual fee.
While Walmart is offering two-day shipping, Amazon is not. Free shipping for Amazon’s non-Prime members range from a five- to eight-day shipping window, making Walmart’s free two-day shipping slightly more competitive. However, Amazon offers free two-day shipping on over 50 million items, compared with Walmart’s two million.
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Walmart also discontinued Shipping Pass– a program that offered subscribers who paid a $50 annual membership fee free two-day shipping on certain products. Shipping Pass was meant to compete with Amazon Prime. It was not successful and the program was canceled.
As part of a renewed focus on its online business, Walmart acquired Amazon e-commerce competitor Jet.com last year for $3 billion, and put CEO Marc Lore in charge of the company’s e-commerce strategy. The recent aggressive moves are the first major changes Lore has made at Walmart since the retailer purchased Jet last year.
Walmart’s online business is a fraction of that of Amazon’s, (Walmart’s online sales were $13.7 billion in 2015, compared with Amazon’s $107 billion,) and Walmart’s online sales gained 29 percent in the fourth quarter, which ended Jan. 31. In total revenue, Walmart still dwarfs Amazon, generating $486 billion in fiscal 2016, — over three times as much as Amazon’s revenue of $136 billion.
(Source: Fashion Network)