Walmart Move Triggers Free 2 Day Shipping Wars
The free 2 day shipping wars have commenced! This week Walmart announced it is beginning free 2 day shipping on any purchase of $35 or over. Walmart is turning up the heat on Amazon as it continues to carve out a substantial online selling space. No paid membership is required (previously Walmart had a membership model in place which it has now scrapped). And items that don't qualify for free 2 day shipping may qualify for free 3 to 5 day shipping.
Up to now, Amazon sellers could charge a little more for items because only the Amazon Prime platform offered free 2 day shipping. But Walmart may one-up Amazon in the free 2 day shipping wars if the pricing Walmart offers online is the same offered in their stores. It remains to be seen whether Walmart’s claim as “the low price leader” will apply consistently to items they send via free 2 day shipping going forward.
As to overall value, Amazon's Prime membership may trump Walmart for now. Amazon's ancillary benefits include:
- greater selection of merchandise
- instant access to electronic media such as favorite music, video and film for its members.
- If your Walmart online order is under $35, you can pay another $6 and still get your order in 2 days.
- One significant caveat from Walmart: weekend and holiday deliveries are not included in the free 2 day shipping offer. Amazon delivers 7 days a week.
Walmart Has an Existing Online Fulfillment Network as Close as Your Local Walmart Store
Since it was not built as an online fulfillment center, the typical Walmart store currently does not have the efficiency of an Amazon fulfillment center. No Kiva robots to pick orders. No elaborate systems of conveyor belts to move things around. But if they begin to convert these locations, the ramp up to free 2 day shipping wars could be significant.
Walmart stores have the added advantage of in store layouts and signage that foster impulse buys. As consumers become more accustomed to the free 2 day shipping wars, will Walmart's revenues from impulse purchases be lost?
It is interesting to note that, in many ways, Walmart and Amazon are morphing toward the same types of ubiquitous retail operations. They now both have physical footprints and free 2 day shipping for online purchases, as just a couple of examples.
Amazon Enters the Auto Parts Sector - Good Move?
The free 2 day shipping wars may not be the only wars Amazon is engaging in. Auto parts sector may be the next big sector battlefront, this time with Amazon as the aggressor.
But how feasible is this for Amazon? Auto parts stores have an employee right across the counter who can guide you toward the right part. Ordering auto parts online is more hit or miss, with a slightly more off-putting return process if the part does not work out. And who wants to wait for free 2 day shipping to fix their car (although same day shipping is available in 40 cities)? Still, Amazon has overcome such obstacles before as it moved into other sectors.
Dash Buttons - the Real and the Virtual
Amazon's dash buttons enable instant ordering that fits into your life. As examples:
- a dash button for a particular brand of detergent in the laundry room
- another in the pantry for your favorite cookies, pasta or canned veggies
- Another in the garage or shed for motor oil, fertilizers, etc.
All the big manufacturers have dash buttons on Amazon but can the smaller brands offer them up to their loyal repeat-buy customers? Answer: yes. There is a design template online that will let a brand-registered seller design their own virtual dash button to let customers order their products from their smart devices and PC's.
Speed Round: Rapid Fire Discussion of Other Amazon Headlines:
- Amazon reserving space on ocean freighters to expand their shipping network.
- Amazon adding 100,000 employees. Where?
- Amazon is talking to PayPal.
- Amazon being sued over 3 leading textbook sellers over counterfeits (see our prior webinar on what to do about rogue sellers on Amazon).
A few of the news sources reviewed for this discussion include:
- Amazon Expands Into Ocean Freight
- Textbook Publishers Sue Amazon
- Amazon is Planning to Hire 100,000 Full-Time Employees
- Walmart's Free Shipping Escalates Battle With Amazon Prime
- Amazon and Wal-Mart go to war over 2-day shipping
For more information on Amazon's free 2 day shipping and other helpful guidance to Amazon sellers, call Awesome Dynamic at (800) 238-1811!
Time stamp notes are available for this webinar video.