When it comes to two-day shipping, Amazon is king: The eCommerce retailer’s Prime service offers free two-day shipping on eligible orders to its more than 100 million members. And the company says it is ready to take on the holidays, with more than 100 million Prime items eligible for free two-day shipping – and a logistics network ready to play Santa.
Amazon Chief Financial Officer Brian Olsavsky said in a conference call with analysts for third-quarter earnings, “We feel like we're going to have great capacity not only for retail products, but also for FBA [Fulfillment by Amazon]. We're going to have great capacity for shipping to our customers. So we're very ready to go.”
With those 100 million Prime members on the planet, two-day shipping is no longer considered just a perk for most online shoppers — it’s an expectation. And that is one that Target and Walmart are seeking to meet by expanding the items eligible for two-day shipping on their eCommerce websites. At the same time, these retailers are highlighting an advantage they have over Amazon: Their two-day shipping offerings don’t require customers to purchase a membership.
In its efforts to take on Amazon, Target plans to offer free two-day shipping without a minimum order this holiday season. The offering will be available on “hundreds of thousands of items” for a period of several weeks between November and December. The retailer also alluded to Amazon Prime’s two-day shipping in a press release, saying there is “no membership required” for its offering.
Beyond the shipping offering, the company noted that curbside pick-up service will be available for customers over the holidays in approximately 1,000 of its brick-and-mortar locations by the close of October, which is “ahead of schedule.” Customers will be able to order products through Target’s app and drive to the store. When they arrive, employees will deliver the goods to customers’ cars, and orders will usually be ready within an hour.
Target said that customers can choose to have their items delivered through Shipt, a delivery service that it purchased for $550 million last year. Through the offering, customers can have products ranging from gifts to groceries and decorations delivered as quickly as one hour. The service relies on a network of personal shoppers who fulfill orders from different retailers and deliver the goods within hours.
With all of these offerings, Target CEO Brian Cornell said the retailer is ready for an influx of shoppers. “I have never felt better about our position and our readiness to deliver against the holiday season," Cornell told the media at a recent event, according to CNBC. "As those [Toys R Us and Sears] stores close, it’s real market share that’s up for grabs.”
In its efforts to compete with Amazon, Walmart is taking a two-pronged approach to items bought through third parties in its marketplace: The company is expanding two-day shipping to cover many of those items from “high-performing marketplace sellers." As of now, the retailer offers free two-day shipping on orders of $35 or greater on a selection that includes millions of products.
Walmart is also implementing an easier return process for marketplace items. Consumers can package their unwanted items and bring them to the Services desk at the retailer’s brick-and-mortar stores. The company will then ship the item to the seller on behalf of the customer, who will receive a refund from the seller.
In a press release, Walmart eCommerce U.S. Chief Revenue Officer Scott Hilton said that “a great product return experience is a top contributor to overall customer satisfaction and repeat purchases.” And, since 90 percent of American consumers live within 10 miles of one of the retailer's stores, Hilton sees it as a “game changer.” When it comes to two-day shipping, he also mentioned that “customers love the offer and the ability to get products quickly without having to pay an annual fee.”
The idea for Walmart and Target, then, is that their own brick-and-mortar stores – and a membership-free two-day shipping option – may be their best ammunition in the battle with Amazon.