From today's Toronto Star:
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 offer the same without raising prices, he said.
