AMAZON RESPONDS TO WALMART’S FREE SHIPPING OFFER
This is a clear example of why competition is beneficial for customers. Less than a month ago, Walmart took a shot at the Amazon Prime service by announcing a subscription-free shipping service that, for a minimum order of $35, would have the items delivered in two-days for absolutely free.
Over the weekend, Amazon fired back with a policy change, rolling back the minimum purchase requirement for free shipping for non-Prime subscribers to $35. Just a year ago, the company had increased the free shipping minimum to $49 for clients who wanted to take advantage of the free shipping, trying to motivate consumers to purchase their Prime membership.
Amazon did not make a big announcement about the change, the company quietly updated their help page over the weekend with the new price, stating that if the client adds at least $35 of eligible items or $25 of eligible books, they would qualify for free shipping.
The free shipping change seems to be motivated by the Walmart move. The e-retailer is working to fend off competition from the likes of Best Buy and Walmart, which are offering free two-day shipping in the U.S. for purchases over $35 from July 2016 and January this year, respectively. However, unlike Walmart, the Best Buy offer is for members only.
Amazon Wants its Customers Back
With the lowering of the threshold for non-Prime members, Amazon is looking to win back consumers who may have possibly gravitated to Walmart. Whether Amazon will announce future changes to its annual Prime membership fee as well in a bid to outpace Walmart remains to be seen.
However, Amazon Prime member benefits remain unchanged. They still receive free two-day shipping with any amount, no minimum purchase required. Also, Prime members have other perks, including the streaming of free digital movies and music. However, they do have to pay $99 a year for that privilege.
