A Walmart package is unloaded from a trailer for sorting at a FedEx ground center in Hagerstown, Maryland.
Andrew Harrer | Bloomberg | Getty Images
Walmart has said it will remove its minimum online shipping for customers who belong to its membership program, Walmart +.
Starting Friday, Walmart + members will receive free next day and two-day shipping, even if they only have one item from the company’s website in their cart. Walmart generally requires customers to spend $ 35 or more to get free shipping.
“Customers have been clear – they want that benefit,” Janey Whiteside, Walmart’s director of customer service, said in a press release. “Being able to throw an item into your cart, regardless of the total, and immediately check out allows them to remove little things from their to-do list in no time.”
The big box giant is doing away with the minimum by trying to persuade more customers to sign up for Walmart + and is aiming to better compete with rival membership program Amazon Prime. Walmart + and Amazon Prime have different prices and benefits. One of Amazon’s popular features is its free and fast shipping, even for items as cheap as a toothbrush or a light bulb.
Walmart’s announcement comes as online shopping has grown in importance amid the global pandemic and during peak holiday shopping season. Many consumers purchase gifts, decorations, baking ingredients, and more from websites to limit trips to the store.
Walmart has also tried to outperform Amazon in terms of price and speed. It has used its footprint of more than 4,700 stores to help speed up order fulfillment. Over 90% of Americans live within 10 miles of one of the company’s stores.
Walmart + launched in September, but the retailer has not released the number of customers who have joined. On an earnings conference call in November, Walmart executives repeatedly dodged analysts’ questions about the number of registrations. When asked by CNBC, the company declined to comment.
In a mid-November research note, BMO Capital Markets estimated that up to 19 million households may have subscribed to Walmart +. The projection is based on a survey of around 1,000 US buyers who found 16% had already signed up.
Amazon Prime had around 126 million subscribers in the United States in October, according to an estimate from Consumer Intelligence Research Partners. The company said in late January that it had more than 150 million paid Prime members around the world – before the e-commerce surge linked to the pandemic.
Walmart previously said it plans to continue adding perks to Walmart + to make it more attractive. During the November earnings call, CEO Doug McMillon said the service was a way to build customer loyalty and leverage his e-commerce growth during the pandemic. E-commerce sales in the United States climbed 79% in Walmart’s third quarter, ended Oct. 31.
Growth in online sales has slowed as the pandemic has spread, prompting some investors to voice skepticism that home-keeping trends, such as the boom in online grocery shopping. , will continue at the same levels after the distribution of the Covid-19 vaccine. This prompted retailers, including Walmart, to look for other sales engines.
Walmart + costs $ 98 per year or $ 12.95 per month compared to Amazon Prime, which costs $ 119 per year or $ 12.99 per month. It includes discounts of up to 5 cents per gallon on fuel and access to a Scan & Go app that lets shoppers skip the line. Customers can also get free and unlimited grocery deliveries to their homes for orders of $ 35 or more.
In addition to Amazon’s fast and free deliveries, its members have access to an extensive library of film and TV content, including blockbuster originals like “The Wonderful Mrs. Maisel.” Prime members can also get free grocery delivery on orders of $ 35 or more and get discounts at Whole Foods, owned by Amazon.
– CNBC Annie palmer contributed to this story.