Firing yet another salvo in its ongoing ecommerce war with Amazon, Walmart is eliminating its fee-based ShippingPass program less than a year after it was created to counter to Amazon Prime, instead offering free two-day shipping on 2 million items at a $35 order threshold.
Previously, Walmart’s free shipping threshold had been $50 and the service-level guarantee three to five days for delivery. For orders under $35, customers can pay $5.99 to get two-day shipping.
“I couldn’t be more excited. We are moving at the speed of a startup,” said Marc Lore, Jet.com founder and president and CEO of Walmart U.S. Ecommerce in a release. “Two-day free shipping is the first of many moves we will be making to enhance the customer experience and accelerate growth.”
“In today’s world of e-commerce, two-day free shipping is table stakes. It no longer makes sense to charge for it,” Lore added.
The 2 million items available for free shipping at Walmart.com is a fraction of the 40 million items available through Amazon, although not all of them are Prime eligible, meaning free two-day shipping for members.
According to data from Kantar Retail, about a third of Walmart customers are Amazon Prime members and have little incentive to switch, Leon Nicholas, chief insights officer at Kantar Retail, told CNBC.
MCM Musings: This is a substantial move for Lore and Walmart.com, and is exactly why it paid a premium to acquire Jet.com and add Lore’s pedigree as an entrepreneur and ecommerce wizard to shake things up. While it will certainly generate more traffic, interest and buzz around the site, Walmart.com has to go quite a bit further to create the “have to have” compelling nature and cache of Amazon Prime, with membership perks like unlimited photo storage, streaming video and music in addition to free two-day shipping.