By  on May 9, 2017
Wal-Mart Signage outside a Wal-Mart store in Duarte, Calif. Wal-Mart is promising it won't be beat on prices this holiday season. But online shoppers shouldn't expect free shipping without any restrictionsRetail Holiday, Duarte, USA

The shipping wars are intensifying.Wal-Mart Stores Inc. and Amazon Inc. have been battling over the fees they charge consumers for shipping to their homes, with each trying to see how low they can go.Amazon fired the latest salvo across Wal-Mart's bow. Less than three months after Amazon reduced its order minimum for free shipping to $35, in an effort to stave off Wal-Mart’s identically priced shipping policy, the online behemoth has quietly lowered the threshold for free shipping to $25. However, it will take five to eight business days for products to be delivered.Amazon in February 2016 raised its free shipping threshold for non-Prime members to $49. Wal-Mart appeared to have the advantage in January, when it scrapped its $49 Shipping Pass membership fee, replacing it with free two-day shipping for $35 on any order of eligible items, while shipping to stores is free. Previously, the threshold was $50. The Bentonville, Ark.-based retailer bested Amazon's three- to five-day delivery window for Prime.Online shoppers in studies say the cost of shipping is a pain point in their online experience. Target doesn't charge shipping fees for orders of $25 or more, while Nordstrom has eliminated shipping charges entirely. But retailers that rush to lower or eliminate shipping charges pay a price in profitability.

"Shopping costs are important but so is convenience," said Carol Spieckerman, founder of Spieckerman Retail. "Amazon and Wal-Mart need to balance both. In some scenarios, convenience is actually more important, so focusing on price only can drive margins down without winning the sale in the end.

"The key will be to offer options that address convenience and price without adding unnecessary complexity," Spieckerman said. "Convoluted shopping and pricing schemes are off-putting to shoppers. Amazon is clearly watching and reacting to Wal-Mart — and Wal-Mart isn't just playing defense. Wal-Mart's ongoing challenge will be to offer a clear and compelling alternative to Amazon Prime."

To Read the Full Article
SUBSCRIBE NOW

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus