Back in 2015 Walmart unveiled a direct competitor to Amazon Prime called ShippingPass, which gave customers free, unlimited two day shipping for online purchases with a $49 annual subscription — undercutting its rival by half but without all the other extra perks for streaming video, music and more. Now, the giant retailer is shifting strategy, dropping the ShippingPass program and instead offering free two-day shipping on more than two million items for all orders over $35, no subscription required.
"In this day and age, two-day shipping is really just table stakes," Marc Lore, Walmart's new US head of e-commerce, said in a statement. "We don't think it's necessary to charge a membership fee for it."
Lore's comment might be seen as a dig at Amazon which doesn’t share information on how many Prime subscribers it has worldwide, but by some estimates the program brings in over $3 billion in revenue and tips Amazon's operating profit from the red to the black. Then there’s the fact that Prime members spend more than non-members which increases the effect Prime has on the company’s finances.
It should be noted that plenty of U.S. retailers offer free shipping past a minimum amount but deliveries usually take three to five business days. Best Buy, for example, provides free shipping for orders over $35 while Amazon has the Super Saver free shipping option for orders over $50.
Walmart's free two-day service is part admission that it got too late to the subscription game, and a move to gain a stronger following with the estimated 56 percent US households that don’t subscribe to Prime.