The Battle of Free Shipping Continues

A wooden crate with the words "free shipping" stamped onto it.

Image credit: Shutterstock

It’s hard to be a big box retailer these days and charge a hefty price for shipping. We keep seeing big-name stores that were once prosperous now closing up shop, and a lot of that has to do with the ease and affordability of online shopping.

For a time, many still chose to shop in-person because that option offered no shipping fees, but that era is slowly coming to an end–and major stores are now battling it out for the best free shipping deal.

This week, Amazon announced that it would be (once again) lowering it’s free shipping minimum for non-Prime members. Shoppers now only need to spend $25 to forgo shipping costsa price that is very reasonable for most people. At the beginning of 2017, the spending minimum was $49, but that changed when Walmart came out with their own two-day, free shipping deal on orders of $35 or more. With the $25 limit, Amazon is now the cheapest place for shipping.

Yet, that could very well change.

Target, which has been offering free shipping at the $25 rate for quite awhile, is planning to run a test program on next-day shipping, starting this summer. As of right now, the pilot program will only be offered in the company’s native Minneapolis (and only to REDcard members), but if it’s successful, the company would most likely branch out to Targets countrywide.

That said, Target plans on charging a “low, flat-fee” for shipping, although executives have yet to determine what that fee will be. If it’s something insignificant (say, $2.95) and you’re ordering a $500 dresser, that fee is worth the next-day shipping. If people are willing to pay a small amount to ensure their items are delivered in a timely manner, it will be one more sting against Amazon–which is exactly what Target wants.

Walmart Offers Free Two-Day Shipping

A photo of the outside of a Walmart building.

Photo credit: tishomir / Shutterstock

Walmart has been gunning for Amazon’s top spot in the online shopping world, and it’s coming up the ranks pretty fast. As of this week, Walmart customers will receive free two-day shipping on millions of items store-wide for purchases of $35 and up.

One of Amazon Prime’s most popular features is its two-day shipping. That’s what made Prime so successful, despite its $99 annual fee. Walmart took notice and introduced its ShippingPass program, which offered two-day shipping for an annual cost of $49.

However, Amazon Prime offers a lot more benefits and perks other than just shipping, making it a better deal overall. Walmart must have realized this because they are now offering free shipping without the annual fee. This is a great way to attract customers who want no frills and their packages delivered quickly. Users don’t have to enroll in a program, either.

Marc Lore, CEO of Walmart US e-commerce, told reporters that “at a very fundamental level, we just don’t believe in having to charge for a membership.”

Lore seems to be sticking to his word, because anyone who purchased a ShippingPass will have their money refunded.

While the free shipping will not count for every item sold, it will for more than two million of the most popular items people usually buy from Walmart, such as food, toiletries, clothes, baby items, electronics, and household supplies. For those who have little time to go shopping but can’t really afford the extra shipping costs usually tagged onto online orders, this is a huge blessing. Orders must be placed before 2pm PST to arrive in two days.

Another added bonus: Walmart doesn’t plan on raising prices to offset the shipping costs.

“It won’t affect our pricing at all,” Lore said. “In fact, we are looking to get more aggressive on the pricing side.”

A Pie Story

A lowly, largely-ignored Walmart pie has now turned into one of its best-sellers. Singer James Wright posted a review of the$3.48 Patti LaBelle sweet potato pie, released to Walmart stores in September, and the video racked up millions of views within days. Now, the pie is hard to find in actual stores, and some people are turning a profit by selling the pies for as much as $40 on eBay.

In the video, Wright breaks into song after tasting the pie (and he’s a great singer), speaks to the pie, and claims that you will “turn into Patti” once you too have eaten the pie. Now, Walmart is struggling to keep the pies in stock. “We are working very hard with our supplier to try and produce more product,” says Kerry Robinson, the company’s vice president of bakery and deli goods. “We’re in the process of securing another 2 million pounds of sweet potatoes.”

So why the sudden need for these specific pies? There are other popular seasonal options, like pumpkin and pecan. But LaBelle’s pie has more cultural significance: Syreeta Gates, a hopeful pie-purchaser, says that the pie is really about celebrating black culture. “I’m sure a lot of our grandmas can make sweet potato pies that are equivalent, if not possibly better, than Patti LaBelle’s pies,” she says, “but this is the first time in a real way that the community–black people, or people of color–have communed together around food via the Internet.” Gates adds that buying the pies feels like “breaking bread” together with the community.

Getting to participate in something of such social value feels to Gates like Thanksgiving, like a treat.

Soraya Nadia McDonald, a reporter from The Washington Post decided to try an experiment. She called her local Walmart store to ask if they had the now-famous sweet potato pie. Before McDonald even finished her question, the employee replied, “The sweet potato pie? No, we’re sold out. You’re the 79th person to call today asking about the pie. Yesterday it was even worse!”

Patti LaBelle placed a personal call to Wright to thank him for the video. “She kept thanking me and she kept telling me how much she loved me and she just kept telling me to be me,” Wright said. “She was like, ‘boy, you can sang!’”

Walmart Plans to Make Organic Foods Cheaper

Organic Walmart isn’t really thought of as the one stop shop for organic or healthy food – but they are trying to change that.

Starting this month, the company aims to drive down the price of organic food nationwide in about 1,000 stores with its new in-house line of 100 or so products in exclusive partnership with Wild Oats.

“There will be no premium for the customer to purchase organic products,” said Jack Sinclair, executive vice president of grocery at Wal-Mart U.S. “They will be able to purchase organic at non-organic prices. We’re removing the premium associated with organic groceries,” adding that “customers have been asking for this.”

Organic products and kitchen stables such as olive oil will cost 25 percent less than their competitors, based on price comparisons of 26 national brands.

“It’s not just the Whole Foods of the world. They’re finding more and more organic foods at Safeway and Kroger, and they’re happy about that, because not everybody feels they have the resources to shop at a store like Whole Foods,” said Amy Sousa, a senior research analyst.

Walmart providing affordable organic products into affordable organics will force competitors like Whole Foods and Trader Joe’s to drop their prices if they want to stay in the game.

Wild Oats used to have it’s own grocery stores in the 1980s. Whole Foods acquired them in 1987 for $565 million. In 2009, the Federal Trade Commission forced Whole Foods to divest its holdings. Wild Oats CEO Tom Casey described the company’s exclusive Walmart partnership as “a movement,” adding: “We’re passing on scalable savings.”

Justice Department Gives Wal-Mart a Slap on the Wrist

walmart

Img: El Ángel Exterminador via Flickr

Wal-Mart has been found guilty of illegally dumping hazardous waste in two states, a dangerous violation that puts the environment and public in danger. For that, the retailer has been slapped on the wrist and given a total fine of $100 million dollars—less than a quarter of one percent of the $44.7 billion of yearly revenue the retail giant earns.

The company was sued by the Justice Department for violating the Clean Water Act in multiple California locations, and was also found guilty of violating federal pesticide handling laws in Missouri. The Environmental Protection Agency (EPA) also brought a lawsuit against the company. Wal-Mart pleaded guilty to all the above charges.

“By improperly handling hazardous waste, pesticides and other materials in violation of federal laws, Wal-Mart put the public and the environment at risk and gained an unfair economic advantage over other companies,” read a statement from the Department of Justice.

Part of the problem lies in the company’s base practices. It didn’t have a hazardous waste program until 2006, and its employees were not properly trained on how to manage and dispose of waste. This lack of training led to hazardous waste being disposed of in municipal trash bins and local sewer systems—putting dangerous contaminants into the environment.

The suit in Missouri involving pesticides came about after years of sending used and re-packaged pesticides to Greenleaf, a recycling company. Greenleaf then resold the products without ingredients lists or directions listed on the labels. Both companies were fined and Wal-Mart was held responsible for getting Greenleaf’s facility back in working order.

Outside of the essentially insignificant monetary fines, the EPA suit settlement dictates that Wal-Mart must implement a comprehensive environmental compliance program in all of its stores across the U.S. The program will teach employees how to manage hazardous waste, among other things.

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