Wal-Mart is offering free shipping with no minimum purchase on all online orders during the week of July 11, its latest move to steal some thunder from Amazon's much-publicized Prime Day shopping event, which takes place July 12.
Wal-Mart will offer the free shipping option alongside 30-day free trials of ShippingPass, a $49-per-year program giving members free two-day shipping on many items. Wal-Mart has seen daily ShippingPass sign-ups more than quadruple in a week compared to the previous week, Internet Retailer reports, although the retailer didn’t disclose how many customers have signed up.
- In addition to touting its shipping deals, Wal-Mart is holding a sale to rival Prime Day this year, as it did last year. Stores including Target, Sears and Banana Republic also are offering deals coinciding with Prime Day, notes USA Today.
Wal-Mart is aggressively targeting Amazon Prime Day, offering discounts on merchandise from televisions and clothes to furniture this week, Reuters reports. And while Prime Day deals are available exclusively to Prime subscribers, Wal-Mart is imposing no such restrictions. “We believe saving money every day is better than just one, and that all customers should save, not only some,” Wal-Mart said in a statement.
While Wal-Mart’s ShippingPass is another pretty clear attempt to take on Amazon, it remains to be seen whether the brick-and-mortar giant can beat the e-commerce pioneer at its own game. It’s true that ShippingPass is almost half the cost of Amazon’s membership, but Amazon also offers a slew of perks, like a streaming service with acclaimed original programming to rival Netflix, that many members feel is worth the annual fee well beyond free shipping.
And although Amazon's highly profitable cloud computing platform and the patience of its investors allow the company to navigate the razor-thin margins of its retail business, Wal-Mart has no such luxury. Its stock tumbled after showing muted growth in the fourth quarter, and recovered after beating expectations in its first fiscal quarter this year. E-commerce remains just 8% of its sales, according to most estimates.
Nick Egelanian, president of retail development consultants SiteWorks International, told Retail Dive that it would be a mistake for Wal-Mart to move too far from its brick-and-mortar stronghold for the sake of e-commerce growth. “Wal-Mart is the biggest retailer in the world, and their system is selling through brick-and-mortar,” Egelanian said. “And they’re efficient. We know that Wal-Mart has the most efficient system in the world. We know that they break that product down and put it on the shelves, and they do that very efficiently also, and then they’re done. And selling on the Internet is not efficient. The whole methodology of selling on the Internet is completely foreign to what it’s like selling at a Wal-Mart.”
Plus, Wal-Mart may be chasing growth that isn’t really realistic, considering its longevity and immensity, Egelanian says.
“Wal-Mart is a very, very successful retailer, the most efficient distributor of goods in the world,” he said. “But they’re a mature company, and mature companies plateau. Does that mean you’re sick? No, it means you’ve hit a plateau, and you become a company that brings dividends instead of growth returns. Every business I’ve ever studied goes from growth to mature. You can’t grow anything forever.”