Walmart is trying to give Amazon a run for its money with its latest pricing initiative.
Starting on April 19, Walmart plans to discount eligible, online-only items when customers opt for in-store pickup instead of home delivery. The new pricing structure is set to cut shipping costs and ramp up the retailer’s ongoing competition with e-tail giant, Amazon.com.
According to Walmart U.S. e-commerce division chief executive Marc Lore, roughly 10,000 online-only items, including bulky car seats, will be eligible for discounts. The new system parallels a “smart basket” feature on Jet.com, the website Walmart acquired for $3.3 billion last year. With smart basket, customers can pay with a debit card and access other options that reduce purchase prices.
First, customers may shop for items labeled with “Pickup Discount” on Walmart.com and opt for in-store pickup at their local store. Customers then receive a discount based on each item part of the new pricing program. Instead of paying for shipping fees, the customer saves up to $50 on the original price of the item with free in-store pickup.
Unlike other retailers, Walmart’s new in-store pickup pricing structure is different because it doesn’t apply on items available at stores. Limiting the system to “online only” items enables Walmart to cut labor costs associated with retrieving products from shelves and back stock. Delivering online exclusive items is also a seamless process, since Walmart’s extensive distribution network and fleet of over 6,700 trucks enables orders to arrive at stores in two business days. By June, Walmart intends to make roughly one million products available for the new discount system.
The move is one of Walmart’s latest efforts to beat out Amazon. Despite undergoing more corporate layoffs this week, Walmart aims to add 34,000 new jobs this year to boost its e-commerce business. In February, Walmart scrapped its Amazon-like shipping offer and now offers free two-day shipping for customers that spend at least $35. Walmart also recently scooped up trendy e-tailer Modcloth and outdoor online retailer Moosejaw to strengthen its digital fashion portfolio and compete with Amazon’s fashion segment.