Competition heats up to win over shoppers with lower free shipping thresholds.
Online retail giant Amazon has quietly dropped its free shipping threshold from $49 to $35, apparently in an effort to challenge Walmart’s new policy. Walmart announced in February that it has scrubbed its ShippingPass in favor of free two-day shipping in its battle for customers. In a conference call, Marc Lore, CEO of Walmart US eCommerce explained that as two-day shipping becomes a customer expectation, “we don’t think it’s necessary to charge a membership for it.”
Apparently, Amazon felt the heat of this recent change to Walmart’s shipping policy, and has reacted by lowering its own free shipping threshold, although the move was done quietly and without fanfare. The change was first noted by The Verge, and an Amazon spokeswoman confirmed that it “recently” lowered the minimum level for free shipping, but would not comment on exactly when the change went into effect or what motivated the policy change. Last year, Amazon had raised its threshold to $49 for non-Prime members. Prime members already get free shipping on most orders with no minimum order.
Under the free shipping policy, items are guaranteed to be delivered within five to eight days after availability. Amazon also offers free shipping to any order that contains at least $25 of eligible books, according to CNN.
The support page now says, “You receive free shipping if your order includes at least $35 of eligible items or $25 of books (in which case all other eligible items in the order also ship free). Any item with ‘FREE Shipping’ messaging on the product detail page, that is fulfilled and shipped by Amazon, is eligible and contributes to your free shipping order minimum.”
Walmart reported a 29 percent increase year-over-year in its ecommerce revenue during the 4th quarter, while Amazon’s sales rose 22 percent in the same time period.