by Doug Desjardins
Wal-Mart fired a shot across the bow of Amazon.com and other online retailers this week when it announced free holiday shopping for online orders through December 20.
The move makes Wal-Mart the first major retailer to completely waive the minimum-purchase standards typically attached to online orders, raising the bar for other retailers. 
“Customers are doing all they can to save money this holiday, so we’re excited to offer free shipping to home with no minimum purchase requirement as an early Christmas present to them,” said Steve Nave, senior vice president and GM of Walmart.com. “This limited-time free shipping on nearly 60,000 select items is just one of the ways Walmart.com is helping families save money so they can bring home more for less this holiday season.”
Retail analysts are expecting other retailers to launch similar programs for what’s shaping up to be another bruising holiday season.
“For the largest retailer in the world to lay down the gauntlet makes everyone in retail have to think about how what they have to offer compares,” said Noam Paransky, an analyst with Kurt Salmon Associates. “I would say that, at this moment, retailers are evaluating how economically they can provide something similar to what Wal-Mart is doing.”
One of those retailers is apparel chain Kohl’s, whose CEO said the company is currently re-evaluating its online strategy for the holidays. “Shipping is clearly an element of the customer’s decision, and we need to be competitive in all those elements,” said Kohl’s chief executive Kevin Mansell. “We have not formalized our marketing strategy but we have to be competitive.”
Wal-Mart was already testing two new programs to grab a larger share of the e-commerce market. “Pick-Up Today” was rolled out in October and allows customers to purchase products online and pick them up at their local store within four hours. Fed-Ex Site-to-Store program allows customers to make online orders and have their purchase shipped for free to a local Fed Ex Office location for pick up.
At the very least, Wal-Mart’s move may force other top online retailer to raise the stakes in shipping, most notably Amazon.com, which helped pioneer the practice years ago with free-shipping offers on Cyber Monday.
“At this point, there is a building expectation for free shipping,” said Andrew Lipsman, an analyst with online research firm ComScore. “If they don’t get into the game, they risk losing consumers to their competition.”
Free online shipping is fairly common – ComScore estimates that 41 percent of online transactions in the third quarter included free shipping – and a 2008 survey from ComScore found that free shipping leads consumers to spend more on each transaction. But it can also erode profit margins, particularly on large and heavy items that are more costly to ship than products like small electronics and clothing.
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Wal-Mart Offers Free Shipping at Home this Holiday Season
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