Wal-Mart sticks to free shipping with some restrictions

AP News
|
Posted: Oct 29, 2015 3:13 PM
Wal-Mart sticks to free shipping with some restrictions

NEW YORK (AP) — Wal-Mart is promising it won't be beat on prices this holiday season. But online shoppers shouldn't expect free shipping without any restrictions.

In a sneak peak to its holiday strategies, the world's largest retailer says it will offer price cuts, or what it refers to as "rollbacks," starting Nov. 1 on thousands of holiday products that will last at least 90 days. That's the same time as a year ago. It also says it will offer fewer weekend-only deals. But as competitive pressure mounts for free holiday shipping, Wal-Mart is sticking with its $50 minimum. Instead, it's encouraging online shoppers whose orders fall below the minimum to pick them up at the store.

Last week, Best Buy, the nation's largest consumer electronics chain, said that it would drop its $35 minimum to qualify for free shipping. Target created big buzz during last year's holiday shopping season when it offered free shipping on all items. The Minneapolis-based chain hasn't come out publicly with its holiday strategy yet. The moves come as online leader Amazon has set high expectations with its two-day free delivery for Amazon Prime members who pay $99 a year.

Fernando Madeira, president and CEO of Walmart.com, told reporters Thursday on a conference call that the vast majority of customers get free shipping because their online purchases exceed the minimum or they pick up their orders at the store.

"It's very simple for shoppers to shop," he said.

The Bentonville, Arkansas retailer also said shoppers can expect more theater in the stores, from Santas to food tastings. It also unveiled a new tool on its mobile app, allowing shoppers to check in when they arrive at the store to pick up their online orders. It said that it expects nearly 75 percent of traffic to its website to come from a mobile device this holiday season. That's up from 70 percent a year ago.

Wal-Mart faces big challenges this holiday season to pull in shoppers. Earlier this month, Wal-Mart's shares took a big hit after it said that profit for next year could fall as much as 12 percent as spending on e-commerce operations and higher wages squeeze the bottom line. It also said that annual revenue growth for the current fiscal year would be flat. Wal-Mart previously forecast sales growth of 1 percent to 2 percent.

Wal-Mart's U.S. CEO Greg Foran is spearheading a major overhaul of the stores that it expects will resonate with shoppers for the critical holidays. That includes basics like making sure stores are cleaner and well stocked. The stores have been criticized for messy aisles and not having enough workers restock the shelves.

Wal-Mart also said that it's committed to being the low price leader as pressure mounts from online rivals like Amazon.

Steve Bratspies, who just stepped in his new role as chief merchandise officer at Wal-Mart's U.S. stores, said that the retailer will be ready to match prices with competitors.

"We feel good about our position," he said. "It's going to be a competitive season, but we are ready for it."