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Wal-Mart offers free shipping to customers

business Updated: Nov 11, 2010 21:54 IST
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For years, Wal-Mart has used its clout as the America’s largest retailer to squeeze competitors with rock-bottom prices in its stores. Now it is trying to throw a holiday knockout punch online.

Starting Thursday, Wal-Mart Stores plans to offer free shipping on its Web site, with no minimum purchase, on almost 60,000 gift items, including many toys and electronics. The offer will run through December 20, when Wal-Mart said it might consider other free-shipping deals.

“Everyone's trying to figure out how we can serve a customer that's trying to save every penny they can,” said Steve Nave, senior vice president and general manager , Walmart.com. “It's the most competitive offer out there, and we're pretty excited about it.”

Even before Wal-Mart's surprise move, shipping prices were this holiday season's predicament for online retailers. In a bid for cost-conscious consumers, Target and JC Penney introduced their most aggressive free-shipping programs ever, and Sears, Toys ‘R’ Us, Williams-Sonoma and others were trying to match the success of Amazon's shipping program, offering unlimited two-day shipping for an annual fee.

But given Wal-Mart's scale and influence in the marketplace, its free pass for shipping sets a new high — or low — in e-commerce. And it may create an expectation among consumers - free shipping, no minimum, always - that would make it harder for smaller e-commerce sites to survive.

Wal-Mart said it will not raise prices to offset shipping and will not press shippers, like UPS and FedEx, to absorb the costs. But Wal-Mart and other big retailers already have low-price contracts with shippers, and the stores maintain distribution centers nationwide that reduce shipping distances and costs.

For smaller retailers and Web sites, which pay regular mail rates and may ship from only one location, free shipping is not as affordable and often must be added into prices.

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