Walmart scraps shipping minimum for subscription service in move to take on Amazon
Posted December 2, 2020 12:02 a.m. EST
CNN — Walmart is dropping its $35 minimum shipping threshold on online orders for its membership program Walmart+, a move that could make the offering more competitive with Amazon Prime.
Walmart said Wednesday that orders for members on items such as electronics, clothing, toys and other merchandise shipped through Walmart's fulfillment centers will no longer carry a $35 minimum to qualify for free shipping. But grocery orders delivered through its stores will still carry a minimum purchase requirement.
Walmart debuted Walmart+, its $98-a-year subscription plan, in September. In addition to free next-day and two-day shipping, Walmart+ members also get 5-cent-per-gallon discounts on gasoline and the ability to scan items with the Walmart app while they shop in physical stores (and pay without waiting in a checkout line).
Analysts view Walmart's membership as another way for the retailer to grow its online business and compete for higher-income shoppers with Amazon, Costco and other retail giants.
Some analysts, however, initially viewed Walmart's $35 shipping minimum as a weakness against Amazon Prime, which requires no minimum purchase to qualify for free shipping. (Most grocery delivery orders through Amazon Fresh, Amazon's grocery delivery service, also carry a $35 minimum.)
Walmart has not yet disclosed how many people have signed up for Walmart+. But CEO Doug McMillon said on a call with analysts last month that Walmart was "excited about the results" thus far.
UBS analyst Michael Lasser estimated in a research note last month that Walmart+ has already attracted up to five million members, and membership will reach 10 million within its first year.
Amazon said earlier this year that Amazon Prime has more than 150 million members worldwide.