Walmart announced that it is scrapping its ShippingPass membership program that was created to compete with Amazon’s Prime subscription.
ShippingPass offered free two-day shipping for a $49 annual fee. compared to Prime’s regular price of $99 per year. However, the service did not offer any Amazon Prime-esque perks such as music and video streaming. To replace he program, the retailer announced that it will now offer free two-day shipping on all orders over $35. Walmart e-commerce chief Marc Lore said, “We are hoping to build loyalty on the fact that you are able to get free two-day shipping…without a membership.” Walmart did not indicate if the ShippingPass program had been struggling.
Walmart, like many other brick-and-mortar retailers, is fighting to keep up with Amazon’s online retail business. The primary appeal of Prime is the fast and free shipping and overall convenience. Walmart has focused a considerable amount of resources on developing its shipping and logistics strategies in order to provide a competitive online retail service.
However, Walmart has a long way to go before it can be considered comparable to Amazon, streaming services aside. Acquiring online retailer Jet.com was a good start in boosting e-commerce, but Walmart’s online product offering still pales in comparison to that of Amazon. Amazon offers over 350 million products on Amazon.com and the Amazon Marketplace, 30 million of which are eligible for Prime two-day shipping. Walmart offers 30 million products and 2 million of those are eligible for the new, free two-day shipping. In order to solidify itself as a competitive e-commerce retailer, Walmart needs to improve the quantity and quality of what it offers. Both Amazon and Walmart sell a majority of products through third-party sellers, but Amazon succeeds in backing up these third-party transactions with the Amazon name.
Online retail is quickly becoming the primary source of consumer-goods transactions. If Walmart can gain a firm foothold in e-commerce and capitalize on this consumer trend, it will be very successful. Regardless of the success of Walmart, consumers can enjoy the low costs and convenience that this race brings.
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Image Source: Walmart