Wal-Mart – “Try This On: Free Shipping!”
The largest company in the retail world, founded 48 years ago by businessman Sam Walton in Arkansas, Wal-Mart has a new message for consumers “Try this: Free shipping”.
The giant retailer’s new strategy is meant to squish the competition and to increase their profits during the holidays. Or, as it considers the New York Times, is a blow to “knockout” online.
Wal-Mart will provide, starting this week, free shipping for products ordered online, without imposing any minimum amount of shopping. Furthermore, the company will offer gifts, many toy and electronics. Although the offer is for the winter holidays, Wal-Mart let them know that will offer free shipping and after.
“Everyone is trying to figure out how we greet customers, trying to save as much as can, every penny,” says Steve craft, senior vice president and general manager at Walmart.com. “We offer the most competitive and are very excited about it,” Vessels added.
But things are not so simple for Wal-Mart and other retailers, since they come with the same offer free shipping for online orders. Target, JCPenney, Toys “R” Us, Williams-Sonoma are just some of the retailers announced that they will bring orders for free to the doorstep.
Weighing Wal-Mart’s size and market influence, free transportation is, in fact, introducing a new concept in business to trade online, which could create an expectation among consumers – free shipping, no limits, always – which will make it difficult survival of small sites, e-commerce. Wal-Mart says it will not raise prices to offset transportation costs and free shipping will not put pressure on, as do UPS and FedEx to absorb the costs.
For smaller sites, which must bear the shipping charges, free transportation is not convenient; therefore, most often the businesses are forced to raise prices. The most successful model of e-commerce is the website Amazon.com. For years, customers offered free transportation for shopping, even just $ 25. “Members of the” Amazon Prime “pay $ 79 annually for unlimited transportation cost for two orders, and at the third getting paid,” said Jordan Rohan, analyst.
Currently, at least 55% of consumers abandon online orders, if transportation is not free. According to comScore, an online research firm, approximately 41% of online transactions include free transportation, usually with a minimum limit of price shopping. Large companies have a huge advantage in battle for free transport, namely the volume.11