Again taking square aim at Amazon Prime, Walmart plans to offer free two-day shipping as part of its $50 a year ShippingPass program, according to a report in the Wall Street Journal. At the same time, the company is looking to build out a distribution network that relies more heavily on regional carriers. FedEx currently handles the bulk of Walmart’s current shipping volume.
Walmart launched ShippingPass last year, offering unlimited free three-day shipping along with the subscription price. It aims to get to the much more desirable two-day delivery promise by a combination of its own massive network – 150 distribution centers, eight ecommerce fulfillment centers and 80 store-based distribution hubs – as well as use of less expensive regional carriers like Lasership and OnTrac, the report stated.
Amazon Prime, on the other hand, charges $99 per year but offers lots of other perks, including unlimited cloud storage for photos, plus a growing library of video and music content. There are an estimated 50 million to 60 million Prime members in the U.S. alone.
Walmart has been spending billions in recent years to build out its ecommerce operations, including infrastructure, supply chain and technology investments. Its ecommerce sales increased 12% to $13.5 billion in 2015, which was dwarfed by pure-play Amazon, as it recorded 17.5% growth to $99.1 billion in sales.
On another front, Walmart is looking to expand its ecommerce marketplace, launched in 2009, by luring more merchant sellers through an integration partnership with ChannelAdvisor. While far behind Amazon in this area, Walmart does have the fastest-growing marketplace, increasing 65% in the fourth quarter of 2015, according to ChannelAdvisor.
Mike O’Brien is Senior Editor of Multichannel Merchant