With Amazon Prime Day ready to dish out more than 100,000 deals to its Prime members on July 12, Walmart is dealing out price cuts of its own. The retailer is offering free shipping with no minimum purchase on all online orders for five full days, from July 11 to July 15.
Despite dominating brick-and-mortar retail, Walmart has struggled mightily in Amazon’s shadow when it comes to selling online. E-Commerce sales growth at Walmart has declined for five straight quarters, with the retailer’s 7% revenue boost in Q1 2016 representing a heavy dip from the 17% increase the year prior. When comparing the two companies in digital sales, Amazon dwarfs Walmart by a grand total of $82.8 billion to $13.5 billion, according to eMarketer.
Given that eMarketer predicts that overall e-Commerce sales will increase 13% in 2016, it’s quite apparent that Walmart has been lagging behind in the digital department, not only compared to Amazon but to a number of industry players.
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If there was ever a time for Walmart to try closing that gap, it’s now. Amazon introduced “Countdown Deals” for Prime members in the days leading up to Prime Day, and is expected to include new offerings such as televisions this year, which would be a hotter commodity than anything the retailer sold on its 2015 Prime Day. While the initial Prime Day didn’t exactly garner the best reviews from consumers, Amazon’s revenues on the day told a different story, and an added product line would only serve to improve the event in the eyes of shoppers.
With that said, it can’t be denied that Walmart is putting in significant effort to leverage the hype of Prime Day to its own advantage, in addition to the week-long suspension of shipping costs. The retailer has been heavily promoting a free 30-day trial for its two-day shipping service ShippingPass, an amenity built directly to rival Prime. ShippingPass is priced at $49 per year, half the cost of Prime’s $99 ticket, and also offers no minimum order requirements along with free online or in-store returns.
This strategy aligns with Walmart’s introduction of new “rollback” discounts online starting July 1, which are available for all shoppers. The rollback prices traditionally last more than 90 days, but the company has not confirmed how long certain items will be discounted for.
With Prime membership expected to increase to an estimated 67.7 million by the end of 2016, and to an ever more impressive trajectory of 81.2 million by the end of 2017, Walmart has its work cut out for it when it comes to attracting the consumer online — and keeping them there for future purchases. As Prime Day sales only bring more publicity to the delivery service, Walmart cannot afford to swing-and-miss on its promotions on, before and in the weeks after July 12.
