Shipping Wars: Is There a Real Winner?

When it comes to shipping products, companies are constantly trying to entice their customers with the best deal. Add enough items to your cart and you’ll be able to receive free shipping. Not only will it be free, but you’ll get your purchase in two days. To cut costs even more, many businesses are offering in-store pick-up instead. It seems like every company has been trying to follow on the heels of a certain massive e-retailer as they try to catch up. Amazon has almost exclusively defined the way we shop. Over the last ten years, it has revolutionized not only shipping, but the way in which everyone shops. Due to its massive amount of fulfillment centers, Amazon was able to speed up the shipping process, while keeping costs low for the consumer. It’s very difficult to change customer expectation once it has been established. Fast, free shipping has becoe the norm rather than an added extra. When it comes to the shopping wars, is there a winner?

Amazon vs Walmart

In the continued battle for dominance between the e-commerce behemoth and the largest big box retailer, shipping has become a big part of the competition. Both companies are trying to out-do one another by offering the better shipping option. Walmart tried a membership to compete with Amazon Prime, but eventually offered free two-day shipping for all customers on thousands of items. Amazon fought back with a reduction on its free shipping minimum. So, what exactly does this back and forth mean for the state of their shipping strategies?

Amazon Shipping

To be eligible for Amazon’s two-day shipping, customers need to be members of Amazon Prime. Items eligible for Prime benefits will be designated on the product page and at checkout. There are five different shipping speeds, ranging from the fastest which is two-hour delivery, and slowest which is the standard delivery of 3-5 businesses days depending on location. According to their website there are over 100 million items eligible for two-day shipping. There don’t seem to be any stipulations based on time or location. Free same-day shipping, however, is dependent on location and only available for certain cities in the U.S. There is a $35 minimum to qualify. It also has a cut-off time that is “usually” around noon. A timer will let customers know how long they have to qualify for free same-day, or if there are changes within that time that don’t make it possible. Should a purchase be placed after the cut-off time, then it qualifies for free one-day shipping. Amazon states that products will be received by 10pm local time. All shipping methods are available seven days a week and most holidays. Marketplace sellers are not Prime eligible and so do not have two-day shipping.

Walmart Shipping

As stated before, Walmart began the fight by offering a cheaper membership for customers, but eventually scrapped that plan. They began offering 2-day shipping, and according to their website, millions of items qualify. Customers need only purchase qualifying items that add up to a total of $35 for two-day shipping. If their items do not qualify, customers may still get free 3 to 5-day shipping. That said, while marketplace items can count toward the $35 minimum necessary for free shipping, the dates may vary due to location. Items that are eligible for two-day shipping must be placed before 2 PM and depends on the time zone where the product is being shipped and not where the customer is purchasing from. There is also a stipulation based on certain states and surcharges may apply. Walmart’s two-day shipping does not include weekends or holidays.

The Verdict?

Looking at the details, it seems as if Amazon has a slight advantage. Walmart has fewer shipping options compared to Amazon. There’s also a cut-off time on all its two-day orders, whereas Amazon only has a cut-off time for same-day delivery. Amazon offers their shipping methods seven days a week, while Walmart does not offer free shipping on weekends or holidays. The biggest advantage that Walmart has, however, is the lack of a membership fee. Amazon may offer free shipping, but the caveat comes in the form of the Prime membership price tag. That said, the membership provides plenty of other benefits along with free shipping. Walmart does offer small discounts for in-store pick up, but it’s hardly the breadth of Prime’s offerings.

How Are Other Retailers Fairing?

Beyond Walmart and Amazon, the competition is quickly catching up. Target has made headway in its shipping game. It’s trying to leverage its stores for in-store pick-up. For delivery, Target is offering same-day shipping through Shipt. The retailer is also offering free two-day shipping for orders over $35. CVS is now offering delivery of prescription and some over-the-counter medication to get ahead of Amazon’s entrance into the industry. The one to two-day delivery isn’t free, costing 4.99 for each one.

Is Faster Really Better?

Business Insider conducted a comparison test between Walmart and Amazon for their two-day delivery service. According to the results, only difference between the two retailers was in communication of shipments and packaging. Walmart had the better packaging and shipped a little faster, while Amazon’s packaging was not as secure, though they shipped fewer packages.
Amazon partner LaserShip has garnered quite a bit of vitriol over the internet for its poor delivery service. The large amount of same-say, one-day, and two-day shipping are too much for more established shipping companies, and so other companies have risen to take the challenge. LaserShip apparently is one of the most popular options because it’s cheaper than companies like FedEx and UPS. However, complaints of missing, damaged, and stolen packages have proliferated across the board. And there’s no way to solve the issue with LaserShip. Customers state the only real solution is to choose a slower shipping method, such as two-day shipping which is taken care of by the established shipping companies.
But that might not be as much of a problem with the younger generation, anyway. According to survey, younger shoppers don’t seem to mind waiting longer for their deliveries. That will at least keep them from having experiences like the unfortunate victims of LaserShip’s ineptness.

Future of Shipping

The majority of customer demands still want faster shipping speeds. They want to have the convenience of instant gratification. Retailers are trying to make it happen. Through smaller companies like Deliv, Roadie, Instacart, and Shipt, many retailers are making sure those same-day deliveries happen. Companies like Deliv are crowdsourcing delivery drivers to get their shipments to the doors of consumers. Advancements in technology can also be the way of the future, with self-driving trucks coming out of distribution centers and drones making deliveries in less than an hour. Who knows, maybe we’ll eventually see the invention of a transporter than can send a product the instant a customer buys it.

that we currently have. This isn’t the retail apocalypse. It’s just another evolution.

Sharon Shichor is the CEO of Eighteen Knowledge Group LLC, your solution and knowledge base for brand building and getting your products and services in the hands of consumers.
Want to learn more about Marketing solutions and trends? Visit our company page and blog for more on the subjects that affect your company’s daily operations the most!
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