Wal-Mart Stores Inc. (NYSE: WMT) said Thursday that it will shorten the delivery time for its pilot shipping program to two days from three days, intensifying the competition with Amazon.com Inc.’s (NASDAQ: AMZN) Prime.
ShippingPass, which was launched last year, allows subscribers to get free delivery of more than 1 million items on its site. The original idea of the service is to help customers get what they want faster. After the change, Walmart is now competing directly with Amazon’s prime, which has more than tens of millions of members.
The retailer also announced to lower the annual fee of the shipping program by $1 to $49, about half of Amazon’s Prime fee. Amazon’s Prime charges customers $99 a year. But prime members not only enjoy two-days shipping, but also have benefits of accessing to free music, books, TV shows and movies.
ShippingPass service is still in pilot phase. Wal-Mart have been investing heavily in e-commerce infrastructure over the two fiscal years. But it still struggling to compete with Amazon online. The company said its stores and distribution centers help lower the delivery costs.
“We can offer faster and more affordable shipping because we have a unique fulfillment network that includes new large scale fulfillment centers, stores, distribution centers and our transportation network,” Wal-Mart said in the statement.
There are no minimum requirements to use ShippingPass and it also supports returns. The service is not available oversee so far.
Wal-Mart shares rose 0.7 percent to $66.92 at 2:04 p.m. in New York.