Wal-Mart to scrap ShippingPass shipping service

Wal-Mart plans to scrap its ShippingPass programme, a fee-based, two-day shipping service it had been testing to compete with Amazon's Prime.

The largest retailer in the world will now offer free two-day shipping on more than 2 million items when shoppers spend at least $35. That's down from its previous spending threshold of $50, and its prior delivery window of three to five days.

According to commentators, the move is the first of the major change that Marc Lore had made at Wal-Mart since the retailer purchased his start-up, Jet.com, last year.

Wal-Mart would give the undisclosed number of members who paid for a ShippingPass subscription a full refund.

"In this day and age, two-day shipping is really just table stakes," Lore, now president and CEO of Walmart US eCommerce, said yesterday. "We don't think it's necessary to charge a membership [fee] for it."

Wal-Mart first started testing its ShippingPass programme in May 2015 as it pushed the programme ahead of Amazon's second Prime Day sales event, when it offered a free 30-day trial. However, the programme failed to take off to the same degree as Prime.

Though the service offered an unlimited number of free deliveries for just $49 a year - $50 less than the cost of Prime, it did not have the perks that had made Prime so attractive.

The free shipping programme would include ''everyday essentials,'' like household products, baby needs, pet supplies, cleaning supplies, beauty products, electronics, toys and grocery items that did not need refrigeration.

Same-day store pickup also continued to be available at over 4,600 stores, and online grocery pickup was live at over 600 stores in the US, with plans for further expansion this year.

''ShippingPass was a very critical part to getting us to where we are today,'' noted Walmart spokesperson Ravi Jariwala. ''It validated the operational efficiencies of the new e-commerce fulfillment centers that we've built up over the last 18 months. It validated that they're in the right locations to be able to cater to customers in their geographies, and be able to deliver within that 2-day or less time period,'' he explained.