Wal-Mart Stores Inc is scrapping its ShippingPass program, which was designed to compete with Amazon.com Inc.’s Prime, opting instead for a two-day shipping model that does not have annual membership fees.
The new service was to be available as of 8am New York time on Tuesday, Wal-Mart said in a statement.
The company plans to refund the US$49 annual fee for all active memberships in its ShippingPass program, Wal-Mart online operations chief executive Marc Lore said.
The retailer declined to say how many people would get the refund.
‘TABLE STAKES’
“In today’s world of e-commerce, two-day free shipping is table stakes,” Lore said in a conference call. “It no longer makes sense to charge for it.”
Lore, the former CEO of Wal-Mart’s Jet.com unit, said the new service would focus on essential, everyday items, such as home goods, pet products and electronics.
ShippingPass rolled out a two-day delivery service in May last year — down from three days — and had required a US$50 minimum order. That threshold is to be cut to US$35 under the new service — the same amount Jet requires for free two-day shipping.
Lore called it a “pretty darn compelling” value proposition.
CATCHING UP TO AMAZON
Wal-Mart, based in Bentonville, Arkansas, aims to encourage more frequent shopping and lock in customers, something that Amazon’s Prime has achieved with its tens of millions of subscribers.
Prime carries an annual US$99 fee, although that service includes perks like free movies and TV shows.
Since Wal-Mart completed its US$3.3 billion acquisition of Jet in September last year, the retail giant has made a big online push to catch up to Amazon.
The integration has so far largely taken place at the managerial level, eliminating staff from Wal-Mart’s online team and elevating Jet executives to take on a more prominent role in the division.
ORDER FULFILLMENT
Today, the companies are to start integrating their warehouse networks nationwide, Lore said.
Wal-Mart operates more than 4,600 stores in the US, which are also used to fulfill some online orders. Most of those orders are to ship out of its five fulfillment centers, which average about 92,903m2 in size.
The company plans to build another center in Florida later this year.
From India to China to the US, automakers cannot make vehicles — not that no one wants any, but because a more than US$450 billion industry for semiconductors got blindsided. How did both sides end up here? Over the past two weeks, automakers across the world have bemoaned the shortage of chips. Germany’s Audi, owned by Volkswagen AG, would delay making some of its high-end vehicles because of what chief executive officer Markus Duesmann called a “massive” shortfall in an interview with the Financial Times. The firm has furloughed more than 10,000 workers and reined in production. That is a further blow
Answering to a reported request by Germany to help address a chip shortage in its auto industry, the Ministry of Economic Affairs (MOEA) yesterday said that it was in talks with domestic chip suppliers. Foreign media over the weekend reported that German Minister of Economic Affairs Peter Altmaier had sent a request to Taipei to ask Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to cooperate more closely with German automakers to provide microchips and sensors, to bridge a shortage that has emerged over the past few months. The MOEA said that it had not yet received the request and could therefore not elaborate
FOCUS ON FOUNDRIES: An analyst said that some investors would be disappointed because they were expecting a larger announcement of a partnership with TSMC Intel Corp’s incoming chief executive officer Pat Gelsinger on Thursday pledged to regain the company’s lead in chip manufacturing, countering growing calls from some investors to shed that part of its business. “I am confident that the majority of our 2023 products will be manufactured internally,” Gelsinger said. “At the same time, given the breadth of our portfolio, it’s likely that we will expand our use of external foundries for certain technologies and products.” He plans to provide more details after officially taking over the CEO role on Feb. 15, but Gelsinger was clear that Intel is sticking with its once mighty
AWARENESS NEEDED: The central bank urged lenders to know their customers before undertaking business for them and to seek funding in conventional ways The central bank yesterday said that it would take action against four foreign lenders for their involvement in helping companies trade in the deliverable forward market in contravention of foreign-exchange regulations. Some grain merchants newly based in Taiwan have since July 2019 been practicing questionable currency-trading activity, with the help of branches and subsidiaries of six foreign banks, the monetary policymaker told an unscheduled news conference. Affiliated firms as of July last year completed currency-related deals they referred to as trading that totaled US$11 billion, which was not in sync with their real business needs, the central bank said after wrapping up