As its competition with Amazon's (NASDAQ:AMZN) Amazon Prime heats up during the holiday shopping season, Walmart (NYSE:WMT) announced today it will begin offering free shipping on all orders placed as part of a Walmart+ subscription. The new policy takes effect on Friday, Dec. 4, as part of the plan to continue adding features and incentives to the service.
Describing the move as "putting something extra under the tree for members," the company will now provide free next-day or two-day shipping to Walmart+ subscriber purchases, eliminating a previous $35 minimum. Delivery on items like groceries will still carry a $35 minimum.
According to eMarketer research reported by The Houston Chronicle, Walmart's online market share is still dwarfed by Amazon's, but is growing nevertheless. Amazon currently controls approximately 38% of all online purchases in the United States, while Walmart has laid claim to around 6% so far.
The COVID-19 pandemic and the general trend of switching to online from brick-and-mortar purchases have driven Walmart's internet sales significantly higher this year. During the fiscal second quarter, the retailer's e-commerce sales jumped 97% year over year, with 79% gains following in the third quarter. Amazon and Walmart are jockeying not only for a share of direct sales, but also for third-party sellers and online advertising revenue, both extremely profitable for the giant retailers.
Walmart's subscription service is cheaper than Amazon's on an annual basis, but still lags in providing streaming video and music and services such as online photo storage. The two-month-old Walmart+ also simply hasn't had time to build up the vast assortment of products offered for sale on Amazon's thoroughly developed online bazaar.