Walmart announced a new, free two-day home shipping service on Tuesday. What makes it significant is there will be no membership fee. Just last May Walmart began testing a two-day shipping subscription service called ShippingPass that mirrored Amazon's successful Prime service. Members to ShippingPass received free, two-day shipping for $49 a year compared to $99 for the similar service at Amazon Prime.
The world's largest retailer also lowered the minimum purchase required for free shipping to home to $35 from $50.
"I couldn't be more excited. We are moving at the speed of a startup," said Lore, who officially joined Walmart in September once the $3 billion deal for Jet.com closed. Added Lore, "In today's world of e-commerce, two-day free shipping is table stakes. It no longer makes sense to charge for it."
Walmart's new e-commerce chief Marc Lore (black jacket) should be smiling on Tuesday.
For Walmart, the new initiative comes at a good time as its long sluggish U.S. e-commerce sales have finally picked up the pace.
After Walmart CEO Doug McMillon conceded that online sales growth was "too slow" last May, the retailer has moved aggressively to improve its digital results by expanding the number of items for sale on the website, making online grocery available in over 4,600 U.S. stores and acquiring Jet.com to help on product pricing.
Walmart's global e-commerce sales rose 20.6% in the third quarter, with the U.S. running at a slightly higher clip. In the first and second quarters, Walmart's global e-commerce sales grew 7% and 11.8%, respectively.
The company will report fourth-quarter results next month.
It's crucial that Walmart gets its e-commerce operations right once and for all. Online sales in the U.S. are expected to reach $523 billion by 2020, a 56% increase from $335 billion in 2015, according to Forrester Research.
The only questions that remain at this point: How much does shipping stuff for free to people's homes eat into Walmart's bottom line and what will Amazon's response look like? One thing that is known, however, is consumers are bound to get some great deals due to this percolating digital war between two retail titans come this year's holiday season.