Since last year, Wal-Mart has been testing a membership program called Shipping Pass that offers unlimited free shipping on many online purchases – effectively the retail behemoth’s answer to Amazon Prime. On Wednesday, Wal-Mart moved to take the pilot program to a wider audience, dangling a 30-day free trial to get more people to give it a try.
Customers’ reception of the offer will serve as a test for Wal-Mart as to whether the program can gain the kind of traction it would need to be able to compete with Amazon’s more established membership program. And it represents just one of many strategic pushes by the big-box retailer to become a more formidable player in e-commerce.
Shipping Pass easily undercuts Prime on price: It is $49 per year, compared to $99 for Amazon’s program. And yet Wal-Mart’s offering is far narrower: The essence of Shipping Pass is free two-day shipping on bestselling products. Prime also makes that promise, but has grown to include other perks such as music and movie streaming, early access to deals, and, in certain markets, one-hour delivery. (Jeffrey P. Bezos, the chief executive of Amazon.com, owns The Washington Post.)
For a long time, customers who signed up for Shipping Pass often had to sit tight on a waiting list before receiving access. More recently, Wal-Mart has moved to allow customers to register and instantly receive the benefits.
Wal-Mart will face no shortage of challenges in trying to lure shoppers to sign up for Shipping Pass. Prime debuted back in 2005, and analysts have estimated some 40 million Americans have memberships. In other words, many online shopping devotees have already become accustomed to turning to Amazon first, and they’ve made a habit of an unbundled approach to online ordering that Prime encourages, in which they might snap up a book one moment, only to follow with an order of paper towels several minutes later.
So Wal-Mart will have to persuade those people to jump ship for Shipping Pass, or cultivate a new group of shoppers to test the appeal of this kind of model.
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