Sam Walton's team took a swipe at online retail giant Amazon.com (AMZN) on Thursday with a new offer of free shipping for many online purchases. Instead of requiring a minimum purchase amount to qualify orders for free shipping, Walmart.com (WMT) will make the deal available for almost 60,000 gift items, including popular toys and electronics, from now through Dec. 20, according to The New York Times.
The move could set off a holiday free-shipping war as the already heated competition for online shoppers heads toward a frenzied Black Friday shopping season crescendo. The trend of free shipping also could accelerate the shift to online shopping for higher-touch goods, which already has hurt mom-and-pop merchants more than anyone else. And it likely won't end with the holidays. Walmart said it might consider other free-shipping deals after its current promotion ends.
For one thing, upfront offers of free shipping can make an online retailer far more attractive. Online shoppers are extremely wary of the possibility of high shipping charges levied at the end of transactions, which has traditionally been a way that many e-tailers -- in particular smaller sellers on eBay (EBAY) or the Amazon Marketplace -- pad their profits.
Amazon has even found a way to make money from so-called free shipping through its Amazon Prime program, in which shoppers pay an annual fee of $79 in exchange for 2nd-Day Air shipping on thousands of items at no additional cost.
Meanwhile, Walmart has been quietly pouring resources into improving its online presence, including expanding its selection. For years, Walmart has used its clout as the nation's largest retailer to squeeze competitors with rock-bottom prices at its stores. Now it is trying to throw a holiday knockout punch online.
Investing in Emerging Markets
Learn to invest in a globalized world.View Course »