In the ongoing race to catch Amazon, Wal-Mart is evolving its “ShippingPass” program to include free two-day shipping. It was less than a year ago that the world’s largest brick-and-mortar retailer, along with a revamped online presence, tried its hand at a subscription-based e-commerce platform. Originally ShippingPass was going to offer unlimited, three-day shipping for a $50 annual fee.
Of course this change in service level is a direct response to infiltrate the massive popularity of Amazon’s Prime. Amazon Prime is similarly a subscription-based shipping service from Amazon. However, a Prime membership costs $99 a year, but does come with other services like video and music streaming, cloud storage, and more. Target, not to be outdone, also recently started offering free shipping on all orders of $25 or more.
As e-commerce sales continue to grow and become a bigger competitor for the traditional big box outlets, these efforts to sway consumers will only increase. In fact Wal-Mart’s efforts to streamline its supply chain and invest in its online presence have been rewarded. Last year Wal-Mart’s e-commerce sales ballooned by over 12%, accounting for $13.5 billion in sales. However in spite of these strides, Amazon still saw a 17.5% annual increase and $99.1 billion in sales for 2015.
The important trend that can be seen from this development is that e-commerce operations, and interest, are at an all-time high and show no signs of slowing. While Amazon has amassed a nearly $100 billion empire, the traditional giants of Wal-Mart and Target are attempting to capitalize as well. According to Statista, e-commerce was a $304 billion sector in 2014, and that’s expected to exceed $491.5 billion by 2018.
When it comes to e-commerce, low prices and fast, free shipping are tantamount to the consumer. So as an online retailer, keeping overhead low allows you to offer lower prices, and an efficient, effective supply chain allows you to get your customers their orders quickly and cheaply. A study by Monetate showed that 47% of online orders include free shipping. Also 71% of shoppers are looking online for the lowest price. And while there are major conglomerates competing in this arena, there is a massive opportunity for smaller businesses as well. Only 28% of small businesses are selling their products online.
Barrett Distribution Centers creates customized e-commerce fulfillment solutions for a variety of industries including health & beauty, cosmetics, apparel and footwear, consumer electronics, food, consumer packaged goods and automotive parts. With deep experience in the direct to consumer and retail omni-channel sector, Barrett can offer the integrated supply chain, warehousing, fulfillment and small package transportation services your business needs.