Merchant Innovation

Walmart Fine-Tunes Free Shipping To Take On Amazon

Walmart Aims At Amazon Shipping

Taking on Amazon isn't usually a safe bet in retail. Jet.com has struggled ever since (and possibly before) being crowned the next new "Amazon killer," and the online giant has already put plenty of brick-and-mortar brands out of sorts. While not a strictly B&M chain, Walmart's bulk is centered in the physical world, but it's not letting Amazon run away with the new prize of free shipping.

Walmart announced Thursday a few tweaks to its free shipping pilot program that charges shoppers an annual fee for no-charge deliveries on qualifying purchases made at Walmart.com. Seen as a shot across the bow of Amazon Prime, Walmart's new shipping policy will offer consumers no-cost, two-day shipping for $49 per year. That's one fewer day packages spend in transit and one fewer dollar customers have to spend for the privilege of cheap delivery they've come to almost universally expect.

"We can offer faster and more affordable shipping because we have a unique fulfillment network that includes new large fulfillment centers, stores, distribution centers and our transportation network," a Walmart spokesman told the Associated Press.

The Wall Street Journal reported that Walmart plans on accomplishing this delivery acceleration without hiking up fees by leveraging regional carriers instead of national ones. The retailer already has an ongoing relationship with East Coast-based LaserShip, and while neither would confirm details of the new partnership, the fact that regional shipping companies can offer rates sometimes a third the price of larger ones may help Walmart scale its pilot program - without doing the same to costs.

“We’re excited to see how they step into this investment and how this plays out,” Josh Dinneen, senior vice president at LaserShip, told the WSJ.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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