Online shipping

Walmart+ members will get free online shipping with no minimum

A Walmart package is unloaded from a trailer for sorting at a FedEx ground hub in Hagerstown, Maryland.

Andre Harrer | Bloomberg | Getty Images

Walmart said it will remove its online shipping minimum for customers who belong to its membership program, Walmart+.

Starting Friday, Walmart+ members will get free next day and two-day delivery, even if they only have one item from the company’s website in their cart. Walmart typically asks customers to spend $35 or more to qualify for free shipping.

“Customers have been clear – they want this benefit,” Walmart chief customer officer Janey Whiteside said in a press release. “Being able to throw an item in your cart, regardless of the total, and pay immediately allows them to get little things off their to-do list in no time.”

The big-box giant is eliminating the minimum as it tries to persuade more customers to sign up for Walmart+ and aims to better compete with rival membership program Amazon Prime. Walmart+ and Amazon Prime have different prices and benefits. One of Amazon’s popular features is its free and fast deliveries, even for items as cheap as a toothbrush or a light bulb.

Walmart’s announcement comes as online shopping has gained prominence amid the global pandemic and during the busy holiday shopping season. Many consumers buy gifts, decorations, baking ingredients and more from websites to limit trips to the store.

Walmart also tried to beat Amazon in terms of price and speed. It used its footprint of over 4,700 stores to help speed up order fulfillment. Over 90% of Americans live within 10 miles of one of the company’s stores.

Walmart+ launched in September, but the retailer did not share the number of customers who joined. During an earnings conference call in November, Walmart executives repeatedly dodged questions from analysts about the number of listings. Asked by CNBC, the company declined to comment.

In a mid-November research note, BMO Capital Markets estimated that up to 19 million households may have signed up for Walmart+. The projection is based on a survey of around 1,000 US shoppers that found 16% had already signed up.

Amazon Prime had about 126 million U.S. subscribers in October, according to an estimate from Consumer Intelligence Research Partners. The company said in late January that it had more than 150 million paying Prime members worldwide – before the pandemic-related e-commerce surge.

Walmart previously said it planned to continue adding benefits to Walmart+ to make it more appealing. During the November earnings call, CEO Doug McMillon said the service was a way to deepen customer loyalty and capitalize on its e-commerce growth during the pandemic. U.S. e-commerce sales soared 79% during Walmart’s third quarter ended Oct. 31.

Online sales growth has slowed as the pandemic has dragged on, prompting some investors to express skepticism that stay-at-home trends, such as the rise of online grocery shopping, will continue. at the same level after the distribution of the Covid-19 vaccine. This prompted retailers, including Walmart, to look for other sales drivers.

Walmart+ Costs $98 per year or $12.95 per month compared to Amazon Prime, which costs $119 per year or $12.99 per month. It includes rebates of up to 5 cents per gallon on fuel and access to a Scan & Go app that lets shoppers skip the line. Customers can also get unlimited free grocery deliveries to their homes on orders of $35 or more.

In addition to Amazon’s fast and free deliveries, its members have access to an extensive library of film and TV content, including hit originals like “The Marvelous Mrs. Maisel.” Prime members can also get free grocery delivery on orders of $35 or more and get discounts at Amazon-owned Whole Foods.

—CNBC Annie Palmier contributed to this story.