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The Free Shipping Arms Race

Friday, February 3rd, 2017

Earlier this week, Walmart announced that it would offer free 2-day shipping on millions of items from its website. The move was a major step for the U.S.’s largest retailer to grow and solidify its ecommerce business. It also was a blatant attack on Amazon’s signature offering. To one-up its online rival, Walmart is offering its shipping services subscription free, a compelling benefit to Amazon’s required Prime membership.

As Walmart’s CEO of ecommerce astutely stated, “In this day and age, two-day shipping is really just table stakes.” He’s right and it should be. Shoppers expect both the immediacy of the store and the selection and convenience of the website. The move to faster shipping without the cost is the next step in making these two worlds come together for the benefit of the consumer.

With its drones and its growing distribution center network, it will be interesting to see what Amazon’s response will be. From Prime Day to original content to Alexa voice ordering, the eComm giant has already attempted to provide value to its customers beyond the basics. Will its next move be an attack with an announcement of one-day free shipping? Or will it go the defensive route and continue to create a robust service ecosystem to keep its key customers loyal?

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