Wal-Mart is offering online shoppers free shipping during the holiday season, putting pressure on competitors to do the same.
The promotion started Thursday and runs through Dec. 20. Nearly 60,000 items are covered. Excluded items include Apple iPods, iPads and products purchased through third-party retailers that sell though Wal-Mart's website.
Wal-Mart says it is making the offer to entice the many shoppers expected to pinch pennies during the economic recovery that has thus far failed to improve the job market or reduce the high jobless rate significantly. "Customers are doing all they can to save money this holiday so we're excited to offer free shipping to home," Steve Nave, senior VP and general manager of Walmart.com, said in a statement.
As the world's largest retailer, Wal-Mart is known for using its clout with suppliers to offer products at rock-bottom prices to win customers from competitors. The latest promotion is expected to force many rivals to do the same. While Target, for example, offers free shipping, it only applies to purchases of at least $50.
The pressure may be felt most by small retailers. Wal-Mart and other large retailers have more warehouses throughout the U.S., which lowers shipping costs.
As of the third quarter of this year, 41% of online retail transactions included free shipping, which was marginally less than the same period a year ago, according to ComScore. As a way to drive sales, free shipping does work. In a 2008 U.S. study, ComScore found that free shipping led customers to spend more on average per transaction.