Amazon strikes back at Walmart's free 2-day shipping offer (WMT)
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Amazon is making it cheaper to qualify for free shipping.
The retailer just lowered its free-shipping minimum to $35 from $49 for customers who aren't members of its Prime membership program.
The change appears to be a response to Walmart's recent rollout of free two-day shipping for all customers on orders over $35.
Amazon is most likely hoping that the change makes it better able to compete with Walmart for non-Prime members.
But Walmart is still the better deal for those customers because it offers all shoppers free two-day delivery — something Amazon offers only to Prime members.
"Although non-Prime members can now avoid shipping fees, they will still have to wait for up to a week for their packages to arrive," said Sarah Engel, the senior vice president of global marketing for the retail analytics firm DynamicAction. "The fact that Amazon didn't outright match Wal-mart's free shipping timeline shows their continued commitment to the recurring revenue Prime model."
Amazon Prime members pay $99 annually for free two-day shipping and a host of other services like unlimited streaming of movies and music. Prime members don't have to spend a minimum to qualify for free shipping.
Walmart has been investing heavily in ecommerce, but it has a long way to go before it catches up with Amazon.
Walmart's online sales were $13.7 billion in 2015, compared with Amazon's $107 billion. Walmart is still far ahead in terms of overall sales, however.
Walmart generated $486 billion in fiscal 2016, which is more than three times as much as Amazon's revenue of $136 billion.
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