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Walmart is crashing Amazon’s birthday party.
After Amazon unveiled a 20th anniversary sale called slated for Wednesday, Walmart said Monday that it too will be holding a sale the same day and temporarily cut its free shipping minimum on orders to $35 from $50. Walmart also mocked Amazon for offering its sale only to Prime members, who pay $99 annually for free two-day shipping and other benefits.
“The idea of asking customers to pay extra in order to save money just doesn’t add up for us,” Fernando Madeira, CEO of Walmart.com, said Monday in a blog post.
Amazon punched back later Monday, accusing “some retailers” of charging higher prices in their physical stores than online, as it now appears both companies are trading barbs in hopes of generating more interest in their summer sales.
“The idea of charging your in-store customers more than your online customers doesn’t add up for us, but it’s a good reminder that you’re usually better off shopping online,” said Greg Greeley, vice president of Amazon Prime, who finished off his statement with a reminder that Prime Day was coming up.
Retailers trying to one-up each other isn’t anything new — though such skirmishes happen more often during the critical holiday-shopping season and not in the middle of the summer. But Walmart’s sale highlights its attempt to be more aggressive with its online strategy and to take on Amazon.
Walmart is by far the world’s largest retailer, taking in $485.7 billion in revenue last fiscal year. Yet the company’s e-commerce sales were just $12.2 billion during that period, putting Walmart well behind Amazon, the top online retailer by sales. Hoping to build its online presence to shore up slow-growing in-store sales, Walmart is now testing a free three-day shipping program called ShippingPass for $50 a year to rival Amazon Prime. The competing July sale may also help Walmart get some much-needed attention online.
As part of Walmart’s sales event this week, the company will unveil more than 2,000 “rollbacks” — what it calls discounts — along with some “atomic deals” on Wednesday. The lower threshold on free shipping will start Monday and last “for at least a few weeks,” a Walmart representative said.
Amazon has been working to build up the ranks of its Prime members — now an estimated 40 million US accounts — since it introduced the program in 2005. A key reason for this strategy is that Prime members spend a lot more on Amazon — about $1,500 yearly, compared with $625 for non-members, according to Consumer Intelligence Research Partners. In addition to the Wednesday sales event, Amazon this year has been expanding Prime Now, a new rapid-delivery service that’s also exclusive to its Prime members.
Updated, 10:30 a.m. PT: Added Amazon executive statement.
