Wal-Mart takes aim at Amazon and makes Shipping Pass a two-day service

May 12, 2016 08:58 AM

(Bloomberg)—Wal-Mart Stores Inc.’s ShippingPass e-commerce subscription program will begin offering delivery in two days rather than three, escalating competition with Inc.’s Prime.

The retailer also is cutting the price of the program by $1 to $49 a year, according to a statement on Thursday. Amazon’s Prime costs $99 annually, though it also offers other perks such as free streaming movies and TV shows.

ShippingPass, still in a pilot phase, lets customers get free delivery of more than 1 million products on the site. The idea is to encourage frequent shopping and lock in customers—something Amazon’s Prime has achieved with its tens of millions of members. Despite being the world’s largest bricks-and-mortar retailer, Wal-Mart is still struggling to catch-up to Amazon online. Wal-Mart is No. 4 in the Internet Retailer 2016 Top 500 Guide; Amazon is No. 1.

Wal-Mart’s strategy in e-commerce is to rely on its stores and distribution centers to support its online efforts. Over the holiday season, the company encouraged shoppers to place orders on its website and pick the products up in stores.

With ShippingPass, Wal-Mart’s existing infrastructure is helping it lower delivery costs, the Bentonville, Ark.-based company said Thursday.

“We can offer faster and more affordable shipping because we have a unique fulfillment network that includes new large scale fulfillment centers, stores, distribution centers and our transportation network,” Wal-Mart said in the statement.




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