Walmart has cut the delivery time of its ShippingPass scheme from three days to two as it looks to claw back ground on Amazon.
ShippingPass, which has not yet been rolled out nationwide and requires customers to join a waiting list to become members, has been in test phase since last year, offering unlimited shipping for $49 (£34) a year.
The move from three to two days brings the initiative in line with Amazon’s Prime service – which costs $99 (£68.69) for an annual subscription, although it also includes other benefits such as free content.
This is part of Walmart’s ongoing drive and investment in ecommerce, which is increasingly being seen as priority number one for the world’s largest retailer. Digital investment has been accelerated to $2bn over 2016/17 with recent initiatives including further roll-out of grocery pick-up facilities, added functionalities to the mobile app and the launch of Walmart Pay.
In the US, Walmart has revealed that one in six of its online grocery customers were new to the retailer, while customers buying both in-store and online at Walmart spend nearly 80% more than shoppers who only visit the store, and 10 times more than online-only shoppers.
The concern is that despite recent improvements, Walmart’s rate of ecommerce growth has slowed to below expectations (an 8% increase in its fourth quarter), which means that, rather than gaining ground on Amazon in online, the gap between the two players is widening.
Amazon’s North American revenue, for instance, grew by 26.8% in its latest quarter.
With fulfilment becoming a crucial factor in ecommerce, Walmart will be hoping the new two-day option, combined with the lower price versus Prime, will be enough to encourage strong take-up of ShippingPass and the subsequent long-term loyalty benefits this can bring.
In fact, Walmart is playing up the fact that its established fulfilment network, including transportation and a growing number of ecommerce-dedicated distribution centres, combined with its 4,600-strong portfolio of US stores, will give it a key advantage over Amazon.