Free shipping may soon be the new normal as retail competition intensifies

When Walmart Canada introduced free shipping on all online purchases last year, it was a clear message to its rivals that it was gearing up for a fight.

TORONTO — When Walmart Canada introduced free shipping on all online purchases last year, it was a clear message to its rivals that it was gearing up for a fight.

Craig Patterson, an analyst who runs the online news magazine Retail Insider, said the move by one of the world’s largest retailers was bold, setting a new standard in going the extra mile for consumer dollars.

“This means war. It’s a declaration of war, no question,” he said from Vancouver.

For the last few years, a battle has been waging among retailers trying to set themselves apart, as entrants such as U.S. giants Target and Nordstrom arrive to compete for the same customers.

“What this comes down to is building trust with the customer,” said Patterson. “Walmart knows that if they offer free shipping, they are coming out punching. When someone like Walmart does it, there is going to be scramble from other retailers to see how they can compete either by adding extra value, better customer service.”

While a behemoth retailer like Walmart may be able to absorb the costs of shipping, it would be a challenging task for smaller retailers to be able to offer the same without raising prices, he said.

The head of e-commerce at Walmart Canada says it wanted to offer a seamless transition between online and in-store shopping by eliminating any minimum purchase requirement.

“It’s not about an e-commerce channel, or about a store channel anymore,” said Simon Rodrigue, vice-president and general manager of Walmart.ca. “It’s really about the customer in the middle. If they want to buy online, if they want to buy on the phone, if they want to buy in store, we want to make sure we’re servicing them.”

Retailers have long struggled with free shipping in Canada, given the size of the country and the cost of shipping quickly to remote areas. The compromise, it seems, is to offer free shipping on minimum purchases, which can offset some of those costs.

Rodrigue said Walmart’s ability to offer free shipping to 97 per cent of the country, and even free next-day shipping to most big cities, has helped it lure customers who either didn’t know they could purchase online the same items found in the store, or were reluctant to try shopping on the website.

The Walmart Canada website now lists more than 175,000 items and gets about 400,000 visitors a day. Next month, Walmart is preparing to launch its new click and collect service, which allows Ontario customers to buy items online and pick them up – with a special access code – from lockers at 10 designated stores or at the company’s head office.

Last month, online retailer Amazon announced that it was offering unlimited free shipping for six months to students in Canada through its Amazon Prime Program. After that, students pay half price for the annual service, which is regularly $79.99 in Canada.

“We designed this by thinking about our customers and finding a segment of our customers that have interesting needs that we can fulfil,” said Alexandre Gagnon, country manager for Amazon.ca.

The offer is aimed at students who live in residences or dormitories, who usually don’t have access to transportation, but still need regular deliveries of groceries, household items and stationary supplies. The hope is that the service will be so valuable that these students will turn into long-time customers.

Gagnon said Canadian consumers are coming to expect low-cost and free shipping with their purchases, but they still expect retailers to offer the whole package: a wide product selection, competitive prices and excellent customer service.

With more consumers opting to shop on their mobile phones, tablets and laptops, retailers are quickly realizing that they must be able to offer the same kind of experience online that customers receive in-store, said marketing strategist Brynn Winegard.

“It’s a growing expectation among consumers, especially around heavy shopping times like Christmas, that there’s free shipping,” she said. “Everyone’s busy so it becomes increasingly required and valuable for retailers to give them their time back and online shopping is a way to permit that.”

Just Posted

‘I was bawling’: Injured Bronco’s mother stunned by his progress after surgery

The mother of a hockey player paralyzed in the Humboldt Broncos bus… Continue reading

Isolated Iceland newly vulnerable to computer scams

REYKJAVIK, Iceland — “Hi, I hope you are not busy?” The treasurer… Continue reading

Two in five indebted Canadians don’t ever expect to escape debt, says survey

TORONTO — A new survey says 40 per cent of indebted Canadians… Continue reading

Study finds microplastics in all remote Arctic beluga whales tested

VANCOUVER — A pioneering study of seven belugas in Canada’s remote Arctic… Continue reading

Federal laws at heart of western anger up for debate as Liberals begin outreach

OTTAWA — Prime Minister Justin Trudeau quickly backed up his pledge for… Continue reading

Your community calendar

Nov. 19 The Mountview Sunnybrook Community Association will hold its AGM at… Continue reading

Opinion: Progress at city hall provides good reason for optimism

In May, the City of Red Deer hired its new city manager,… Continue reading

Kelowna picked to host 2021 Brier

Kelowna, B.C., is set to host the Canadian men’s curling championship for… Continue reading

Canada wins doubles match to advance to Davis Cup semifinals

MADRID — Canada has advanced to the semifinals at the Davis Cup… Continue reading

Nova Scotia’s Barbara Hannigan already has a Grammy, but this nod is especially personal

Picking up her third Grammy nomination is wonderful in itself, but for… Continue reading

Some binge-worthy options for holiday gift season

NEW YORK — Chances are there’s at least one TV binger on… Continue reading

Humphries formally selected for USA Bobsled’s national team

Kaillie Humphries is officially part of USA Bobsled’s national team. The two-time… Continue reading

Hamilton receiver Banks leads East domination at CFL awards banquet

CALGARY — After dominating the 2019 regular season, Brandon Banks and the… Continue reading

Most Read