Walmart Abandons Two-Day Shipping Membership Program ShippingPass

Walmart announced that it is discontinuing its two-day shipping membership program, ShippingPass, effective January 31, 2017. The program first launched in May of 2015

Subscription News: Walmart Abandons Two-Day Shipping Membership Program Shipping Pass

Source: Walmart

Walmart announced that it is discontinuing its two-day shipping membership program, ShippingPass, effective January 31, 2017. The program first launched in May of 2015 as a three-day shipping program that allowed members to receive unlimited shipping for $49 a year. At launch, the program was available by invitation only and it only included about 1 million of Walmart’s 8 million online items. Then, in May of 2016, Walmart upgraded the program to offer unlimited two-day shipping with no minimum order requirements.

“No matter how small the order or how far it needs to go, ShippingPass provides unlimited nationwide shipping. No matter what your shipping needs, Walmart’s got you covered. Sign up for ShippingPass so you can shop more, save money and live better,” read Walmart’s ShippingPass page.

Walmart created a waitlist for the two-day shipping programing. Customers could go to the ShippingPass page on the Walmart site and could add their email address and zip code to join the list, so the company could contact them when the service was available in their area. To facilitate the new service, Walmart planned to shift inventory to eight U.S. e-commerce warehouses and work with regional carriers and employ its own private fleet to deliver packages.

But ShippingPass is no more. Walmart said it will provide full refunds to ShippingPass members within 30 days using the original form of payment.

Subscription News: Walmart Abandons Two-Day Shipping Membership Program Shipping Pass

Source: Walmart

“Now, all Walmart.com customers can enjoy Every Day Low Prices with the convenience of fast, FREE 2-day shipping on eligible orders without a membership fee,” Walmart said in a statement. “To all our active ShippingPass subscribers, we thank you for helping us develop our new 2-day shipping offer.”

Subscription News: Walmart Abandons Two-Day Shipping Membership Program Shipping Pass

Source: Walmart

Under the new, free program, two-day shipping is available to online customers if the item shows the two-day shipping logo, their order is over $35 and they order the item before the 2 PM cutoff time. For items that aren’t eligible, Walmart will offer free three- to five-day shipping on orders over $35, provided the items are sold directly by Walmart and not a marketplace seller.

“With this new announcement, we have chosen to end ShippingPass. ShippingPass was a step along the way to ultimately deliver you free two-day shipping,” Walmart said.

Walmart doesn’t specify how many items are available for two-day shipping, except to say “millions of items.” Walmart says it may ship items by ground or air, and they will not ship on weekends, though some items might be delivered on the weekend based on the item, location and how it is being shipped. At this time, two-free shipping is restricted to the continental United States.

Subscription News: Walmart Abandons Two-Day Shipping Membership Program Shipping Pass

Source: Walmart

Bloomberg reports that Marc Lore, CEO of Walmart’s online operations said, “In today’s world of e-commerce, two-day free shipping is table stakes. It no longer makes sense to charge for it.”

Walmart’s new two-shipping program mirrors that of Jet.com, a company it acquired last summer for $3.3 billion in cash. According to Bloomberg, the two companies will begin integrating their nationwide networks in February. Most of Walmart’s online orders come from five fulfillment centers and is planning to build another in Florida later this year.

Insider Take:

Despite Walmart’s place as a giant retailer, its biggest online competitor is Amazon and ShippingPass competed directly with Amazon’s Prime program which offers two-day shipping to members with no minimum order requirement. While Prime members pay $99 a year for the two-day shipping privilege, they get a host of other services with it including Prime Video, Prime Music, Prime Photos, Prime Pantry, early access to Lightning Deals, access to the Kindle owners’ lending library, Prime Reading, Kindle First, Audible Channels for Prime, Twitch Prime and much more.

In this pilot program, Walmart tested it with three-day shipping, adapted it to two-day shipping and eventually abandoned the program altogether. To abandon ShippingPass less than a year into the two-day shipping program, Walmart must have realized that competing with Amazon at that level was nearly impossible without a costly infrastructure.

The testing period and ShippingPass were not a waste of time though. Walmart undoubtedly learned a lot through the experiment and has adapted its program along with its change in circumstances – the acquisition of Jet.com – to better serve its needs while also addressing its customers’ needs. It will be interesting to see what other changes will come about as a result of the acquisition.

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