News Feature | April 22, 2015

Walmart Canada Switches To Variable Shipping Fees

Source: Innovative Retail Technologies

By Marco La Vecchia, VP Channel Sales, AVG Technologies

Walmart Canada Shipping Changes

Walmart Canada customers will now have to make a $50 minimum purchase on the retailer's website in order to receive free shipping to their homes. The change began earlier this month, after Wal-Mart Stores Inc. cited rising Canadian postage costs as the reason for the switch. The announcement came on their website. For orders under $50, customers will now be required to pay the optional $4.97 per order to have their purchase delivered to their door. As an alternative, Walmart Canada offers two other shipping options, with shipping to any over 5,000 Canada Post locations or a “Grab & Go” locker at a nearby Walmart store.

Citing high Canadian shipping costs, Alex Roberton, director of Corporate Affairs, says, “As a result of the rapid growth of Walmart.ca, we are now at a point where it is necessary to apply variable shipping fees, which we are working to do in a fair and democratic way.”

Retail analysts say one reason for the change in shipping policy isn't only rising costs, but also a lack of competition for Walmart Canada. Target came into Canada expecting to dominate the discount market, only to met with a series obstacles, and the retailer has wrapped up its operations this month. With the departure of beloved discount chain Zellers, and now Target, Walmart Canada faces little competition. The retailer offered free shipping for purchases under $50 for free for three and a half years, including when Target was expanding its Canadian operations. Throughout the offer, even purchases for as little as $5 were eligible for the free shipping. With a bigger presence in the market, Walmart Canada knows that many Canadians will continue their patronage, and will likely pay extra or add extra to their orders to get fast shipping.

The retailer offers more than 40 Grab & Go locker location in the Toronto area, allowing shoppers to pick up their Walmart Canada online purchases in-store, and recently expanded the service, adding 10 lockers to the Toronto area. The Grab & Go lockers are one way that Walmart Canada offers an omni-channel shopping experience for customers. Purchases eligible for Grab & Go must weigh no more than 65 lbs, and measure no more than 2 meters on any side. All of the lockers are offered to customers who reside within 50 km of a Grab & Go locker, and once the customer selects the option for delivery, they're presented a 6 digit PIN code via email. They may then use the PIN code to retrieve their order from the locker. Customers' purchases are kept in the lockers for a period of three days, and then are returned to WalmartCanada.ca for a refund.

Walmart Canada currently operates 391 stores throughout Canada, and is one of the nation's biggest employers. Reports say that the free delivery minimum amount doesn't apply to those residents of remote Canadian locales. Amazon also recently begin expanding its Canadian operations, moving into a five-level office in a Toronto skyscraper, and will occupy a 127,000 square foot space.