Walmart is going head-to-head with Amazon – again – by testing a two-day shipping subscription service, reports the Wall Street Journal. This time last year, the world’s largest retailer started a three-day subscription service, ShippingPass, available for $50 a year. At launch, ShippingPass was available by invitation only and included only 1 million of Walmart’s 8 million online products.
To facilitate the new service, Walmart will shift more inventory to eight U.S. e-commerce warehouses, and it will work with regional carriers to help ship packages at rates lower than national carriers like FedEx and UPS. In addition, Walmart will employ 6,000 of its own private fleet to offer two-day shipping to subscribers.
Walmart will offer the new two-day service for $49 a year, and current ShippingPass subscribers will be upgraded from three-day shipping program to two-day shipping. There are no minimum order requirements, and returns online and in-store are free. There is no long-term commitment; subscribers can cancel at any time.
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“No matter how small the order or how far it needs to go, ShippingPass provides unlimited nationwide shipping,” says Walmart’s ShippingPass page. “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.”
Walmart customers interested in signing up for the service can enter their email address and zip code to be added to the waiting list. Walmart will contact those individuals when the service is available in their area.
Can Walmart really take on Amazon? According to the Wall Street Journal, Walmart is making a $2 billion investment in technology and logistics dedicated to supporting its e-commerce efforts. With Walmart’s sizable trucking fleet, regional trucking partnerships, and extensive distribution and logistics experience and expertise, Walmart could certainly make a go of it.
This service will directly compete with Amazon, and the competition will hopefully bring out the best in both companies as they try to reach their own sales and market share goals while satisfying subscribers’ desire for free, quick delivery.
Amazon offers much more than Walmart for its annual subscription fee of $99 – including Amazon Prime video, photo storage, cloud storage and two-day free shipping – but Walmart has its own advantages, including that it is focused solely on retail and distribution. Amazon, on the other hand, is juggling many different lines of business and rivaling large competitors like Netflix.
If Walmart can leverage what it already does well and use technology to improve distribution and delivery times, this additional subscriber revenue could be a nice addition to Walmart’s deep pockets with the added bonus of making Jeff Bezos sweat a little along the way.