Walmart has cancelled its ShippingPass subscription delivery pilot only seven months after opening the platform to all shoppers, a sign of the difficulty competitors face in offering an alternative to Amazon Prime.
Instead of operating a membership program, Walmart is dropping its free shipping threshold from $50 to $35 for all shoppers. And while the $50 threshold initially netted consumers three- to five-day free shipping, the new $35 offers shoppers free two-day shipping. There is no minimum price threshold for items shipped to Walmart stores.
All ShippingPass subscribers will receive a full refund.
Walmart’s pivot away from the Prime-like program is a textbook example of how difficult it can be to compete with Amazon, even with massive resources. If Walmart can’t create its own e-Commerce subscription service, then it’s safe to say the rest of the industry will have a tough time emulating that model.
Competing With Amazon In Bits And Pieces
But Walmart’s move does teach other industry players that they can take on individual features of the Prime service to fit their own brand experiences.
Take free shipping, for example. With free shipping serving as the number one incentive to shop online for 90% of shoppers, according to Walker Sands Future of Retail 2016 study, Walmart acknowledges the reality that consumers don’t want to jump through hoops to get shipping fees waived. With free shipping now more of an expectation than an added benefit, retailers must integrate it in a way that isn’t cumbersome, nor require an upfront subscription fee.
In a contributed piece published on Retail TouchPoints in January, Peter Kearns, the Director of Customer Success at Feedvisor, noted that Walmart was making a big mistake trying to directly compete with Amazon through a subscription-based model in the first place.
“Walmart ShippingPass would have to make a major move, such as acquiring Netflix, in order to compete with Prime’s membership benefits,” Kearns wrote. “Securing Netflix or an equally large partnership would allow Walmart to offer the same level of original content as Prime. In other words, ShippingPass needs to go beyond offering only what its name intends — free shipping. Free shipping should instead serve as the icing on the cake of a plethora of member benefits including exclusive content.”
Kearns cited Prime’s added benefits, including an expanded product catalog, successful branding and original content such as music and videos, as reasons why ShippingPass was doomed to play second fiddle from the start.
With that in mind, the customer experience remains the main driver of any retail service. While retailers can’t possibly expect to offer their own version of Prime at this stage, more companies have to take content marketing seriously as a value driver.