A few days ago, Amazon, the global leader in the online retail industry, announced that it will reduce the price of non-member shipping from US$49 to US$35. Why did Amazon lower the price of free shipping for non-members so soon after raising the price? In fact, this rapid price adjustment is due to fierce competition from another competitor, Walmart. Amazon online shopping users are mainly divided into two categories. One is a Prime free shipping member who can get free shipping by paying $99 per year, and the other is a non-member consumer who once made a purchase of $49 to enjoy free shipping (usually two-day shipping). Prior to this, Ma Xunxun had encouraged users to make repeated purchases through the Prime free shipping membership system. The average purchase amount of Premier members is much higher than that of non-members. For non-members, they need to purchase $49 to qualify for free shipping, which typically delivers within two days. Amazon generates considerable operating income through its Prime free shipping membership system.
Walmart has launched an aggressive competitive strategy against Amazon in the online retail market: customers with a single purchase of more than $35 can enjoy free two-day shipping. The policy covers more than 2 million products. Walmart has also eliminated paid free shipping memberships, such as Amazon Prime, in an effort to make free shipping more widely available. "Two-day shipping is like a gamble in this day and age," said Mark Lore, head of e-commerce at Walmart U.S. We don't think there's a need to charge a membership fee for this. ?Walmart has started a battle with Amazon, who will be the ultimate winner?
As a global physical retail giant, Walmart continues to respond to the rapid development of online retail and constantly changes its online retail business. As the global leader in online retail, Amazon is of course regarded by Walmart as its biggest competitor. Back in 2015, Walmart launched ShippingPass, a service that hoped to directly compete with Amazon Prime. Customers only need to pay $49 per year to enjoy unlimited two-day shipping throughout the year.
Amazon’s reduction of free shipping prices this time is not only a response to Walmart’s offensive strategy, but also because free shipping starting at $35 has now become a unified threshold for the US online retail industry. In addition to Walmart and Amazon, as early as July last year, Best Buy, another smaller consumer electronics retailer in the United States, had implemented a free shipping system for online shoppers starting at $35.