Amazon started as online book store and has grown to be the worlds largest online retailer.
Walmart one-day free shipping to compete with Amazon’s delivery promise
Walmart have alluded to the introduction of Walmart one-day free shipping after Amazon promised to cut their delivery speed in half for US customers.
Walmart have encouraged shoppers in a tweet on Friday to “stay tuned” for “one-day shipping without a membership fee.” The move would see Walmart directly competing with Amazon’s delivery promise in the US.
On Thursday, Amazon had announced in their first-quarter results a move from two-day delivery to one-day for US Prime members. Amazon said that they intend to invest $800 million in the second quarter of 2019 to upgrade their delivery offering.
This is really interesting as Amazon have built their delivery offering over 20 years and the likes of Walmart have only recently caught up with Amazon on two day shipping. Now Amazon have once again set retail standards and expectations to be one day shipping in the US, Walmart have been forced to follow and are once again in the business of playing catch up.
Walmart and Amazon’s delivery offering
Walmart are currently offering free two-day shipping for items over $35 (£27) in the US. The scheme asks US shoppers to order eligible products before 2pm to qualify for the offering. Walmart’s two-day shipping excludes holidays and weekends. The programme works on the maximum order value basis to encourage shoppers to buy more.
Amazon’s free two-day shipping is exclusive to Amazon Prime members costing. $119/year. This raises a question of which consumers get money for value? Walmart’s decision to speed up their delivery duration would mean that every single shopper can get an accelerated free delivery option which might attract a larger pool of consumers to their proposition.
Amazon’s shoppers have to pay the Prime membership fee to enjoy the speedy delivery perk. However, by becoming Prime subscribers, shoppers get additional benefits such as access to Prime Vidoe, Music, Reading, Photos and more. However, how many shoppers use every single perk offered by Amazon? Where Amazon does win is that they don’t have a $35 minimum order value and they don’t have a cut off time of 2pm for next day delivery. On Amazon, for Prime eligible product, there is no order minimum for free shipping so Walmart have their work cut out to match Amazon’s proposition even once they start to do next day deliveries.