Wal-Mart Stores Inc. is hoping free shipping with two-day delivery will lure more shoppers to WalMart.com.
Wal-Mart, No. 4 in the Internet Retailer 2016 Top 500 Guide, announced today it will offer free 30-day trial memberships to its ShippingPass pilot program, which launched last year. The program is similar to Amazon.com Inc.’s Amazon Prime membership in that shoppers pay an annual fee – in Wal-Mart’s case, $49 compared to $99 for Amazon Prime – to receive free shipping and returns on online orders for select items including clothing, health and beauty products, and electronics. A logo next to the product will show shoppers which products are eligible for the ShippingPass service.
Unlike with Amazon Prime, Wal-Mart ShippingPass customers don’t get perks like free same day shipping or content streaming. Instead, shoppers get free two day shipping on all orders with no minimum order.
Fernando Madeira, president and CEO of Walmart.com, wouldn’t outright mention Amazon (No. 1 in the 2016 Top 500) in a note announcing the promotion on Wal-Mart’s site. But he hinted that this is designed at siphoning online shoppers away from the online retail giant.
“ShippingPass is about half the price of similar programs out there at just $49 a year, and customers who are using it, love it,” he writes.
Shoppers who have already signed up for the program and paid the $49 fee will receive an additional month free. A Wal-Mart spokesman is not disclosing the number of shoppers who have signed up for the program.
Retail industry experts say the move is clearly an attempt to move shoppers from Amazon to WalMart.com.
“Wal-Mart has a problem. Its sales are basically flat,” says Paula Rosenblum, managing partner at consulting and research firm RSR Research LLC. “It is trying all different kinds of initiatives to drive customers to its site, and get them to buy repeatedly. One of the things it’s trying is basically Prime at half the price. This sounds good on paper, but does miss out on some of the other benefits Prime members get, including content, e-books, and where available, free two-hour delivery.”
On Wal-Mart’s Q1 2017 earnings call last month, CEO Doug McMillon expressed his displeasure with the retailer’s 7% year-over-year global e-commerce growth rate, only about half of the growth in the online retail industry as a whole.
This isn’t the first time Wal-Mart has tried to steal Amazon’s thunder. Last summer, Wal-Mart ran a week’s worth of deep discounts and lowered its free shipping threshold on online orders to $35 in response to Amazon’s Prime Day 20th anniversary sale. A spokesman said the promotion had succeeded. “The last three days have been among some of our biggest days ever for online orders,” he said.