Walmart Rolls Out Free Two-Day Shipping In Move Against Amazon
NEW YORK (AP) — Wal-Mart is trying to get a jump on Amazon's second annual sales bonanza.
The world's largest retailer is offering a free 30-day trial on its two-day unlimited shipping service, and an extra month free for paying members, starting Wednesday as it looks to sharpen its attack against the online leader.
Beginning Friday, it will also offer discounts on an array of products from swimming pools to electronics that will ramp up as July goes by. These discounts, or what Wal-Mart calls "rollbacks," typically last 90 days or longer.
Wal-Mart's moves come as Amazon is expected to launch for the second year a sales bonanza called Prime Day, which it has touted as bigger than "Black Friday." It underscores how serious Wal-Mart is about boosting its online sales, which have been slowing in the last two years.
Wal-Mart reported in May that global e-commerce sales rose 7 percent in the first quarter, weaker than the 8 percent in the previous quarter and far below the 20 percent increases seen less than two years ago. Wal-Mart's U.S. online business was a little better but still disappointing. That came as the company reported overall strong first-quarter results that were a bright spot in an otherwise somber season for many retailers.
Last July, Wal-Mart responded to Amazon's Prime Day by lowering the threshold for free shipping for online purchases to $35 from $50 for at least 30 days and offering discounts on thousands of items online. Other stores, including Macy's, also scrambled to offer discounts on their websites in an effort to compete.
Amazon's Prime Day last year, on July 15, was tied to its 20th anniversary and the sale was aimed at its Prime members. The company decided after the sale it would become an annual event.
In May, Wal-Mart Stores Inc. trimmed its free-shipping pilot program ShippingPass to two-day delivery from three and cut a dollar off the membership price to $49. It's the answer to Amazon Prime's two-day shipping. Amazon's membership costs $99 a year but it comes with lots of perks like streaming music and video and household subscriptions. Amazon's Prime program has been a key part of its domination online. Analysts say members buy more frequently and spend more money. In its annual shareholder letter in April, Amazon founder and CEO Jeff Bezos called it an "an all-you-can-eat, physical-digital hybrid."
So, Wal-Mart faces plenty of challenges. In a blog post early Wednesday announcing Wal-Mart's plan, Fernando Madeira, president and CEO of Wal-Mart.com's U.S. division wrote, "Once you start using it (ShippingPass), it's hard not to notice the everyday low prices on the stuff you need and want."
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