Walmart vs Amazon, let's get to the nitty gritty of two-day shipping, who will come out on top
On January 31, 2017, Walmart woke up the market with its FREE 2-DAY SHIPPING. Walmart may have lost its retail momentum to Amazon, but the retailer is not going away quietly, they are back again with another innovative approach. One of the biggest motivations amongst consumers when shopping online is free shipping. Recent studies have shown that consumers buy more if shipping is free.
Now that Walmart has upped the ante and ventured deeper into Amazon territory and changed its business practices to capture more online users, will this be a better deal for Walmart and its consumers? What is Walmart really up to?
Research has proven that Amazon accounts for almost a third of all e-commerce sales in the U.S. and half of the industry's growth. It will be difficult because Prime is working well for Amazon and although Amazon doesn't disclose the exact number of prime memberships. Analysts estimate that nearly half of all U.S. households have a prime membership.
Walmart believes this move will be a significant game changer for the largest retailer. In addition to dismantling its ShippingPass venture they pushed last year to consumers, they will also refund the $49 fee. At Walmart.com, free two-day shipping is available on eligible orders of $35 and above without having to pay a membership fee.The beauty of Walmart's NEW two-day shipping product selection will be heavily focused on consumable products. This is the type of stuff you need more frequently with quick delivery (toiletries, household items, and food). They believe this is their advantage point since their products in this area are considerably lower than Amazon.
But I believe this will be a hard choice for the loyal Amazon Prime consumers since Walmart doesn't offer:
- Free Music Streaming
- Free Television and Movie Streaming
- Free Kindle Books each month
- Free Unlimited Photo Storage
- Discounted Baby Supplies
In addition to the special services, Amazon has more inventory in their warehouses and with the new launch of AmazonGo I think Walmart will need to innovate fast to catch up to Amazon. Chief Insights Officer, Leon Nicholas, of Kantar Retail, believes Walmart is simply too late to the subscription game. According to Kantar's data, roughly one-third of Walmart shoppers are prime members.
Walmart is hopeful that this latest venture will secure their title as the number one retailer in the U.S. They believe FREE TWO-DAY shipping with no membership fee is a welcome change for consumers. But will those consumers welcome the change.
We now hand this over to the consumers to decide who will prevail. If Walmart comes out on top then this backroom brawl of the brains was worth the long hours, but if Amazon comes out on top then we take another bow to one of the top innovative businesses in the U.S that remains a constant trendsetter.
Tiffany - this is great. I had no idea that Walmart was starting to offer Free Two-Day shipping. I may need to take a look at that although admittedly - I am a loyal Amazon Prime User! I bet there are a lot of people though that will be attracted to the free 2 day shipping from Walmart - especially for the more common day to day stuff.
Executive Coach. Organizational Consultant. CEO of Center for Advanced Emotional Intelligence (AEI).
8 年Interesting to hear that Walmart will be competing more directly with Amazon by offering 2-day shipping. This will give consumers the option to cherry pick purchases from both Amazon and Walmart. The challenge will be getting consumers to remember to go to Walmart.com to do their online shopping.