Walmart is reportedly changing their ecommerce shipping policies by testing to see if they can deliver more products in two days or less via ground shipping rather than air shipping. As a result of this change, the retail giant began telling online shoppers in August that products in some of its warehouses are “out of stock” if the consumer’s delivery address is outside of the 2 day delivery window, according to the Wall Street Journal. This change has led to a decline in sales for some companies who sell products on their website. We talked with Mike Williams, CEO of uShip, a shipping and logistics platform connecting ecommerce retailers and transporters. He gave us some great advice about this new strategy and how he sees this impacting both the company and its sellers in the upcoming months.
Q. How do you see this new ecommerce shipping policy impacting Walmart and the companies that sell through them in the upcoming months?
“Clearly the Amazon Effect is at play here. Walmart is recognizing that customers now expect fast and free, or nearly free, when it comes to ecommerce delivery, no matter what size item. Walmart definitely recognizes this and is now shifting the logistics pressure to its suppliers and those selling on its site so items are closer to any given buyer at any given time.”
Q. Do you think this new strategy was a smart move on Walmart’s part?
“In the short term, Walmart is sacrificing the customer experience by indicating certain items are out of stock. Will those would-be shoppers ever return? It’s doubtful given the multitude of options people have today. But, the new strategy also shows just how important final mile delivery has become to companies’ big picture, so in that way, it’s probably a smart long-term move.”
Q. Do you believe consumers are more likely to go to a different ecommerce platform to find a product if something is out of stock on Walmart’s website?
“Yes, it’s very likely they will lose customers who get the ‘out of stock’ message. We’re living in a time of instant gratification, so if an item isn’t available in one location, it’s certainly available somewhere else – probably for less and with free shipping.”
Q. Has this strategy already led to a decline in sales for Walmart.com?
“It’s unknown, but according to executives at Walmart suppliers, the move has caused some decline in sales so far.”
Q. What advice would you give to ecommerce retailers about future shipping policies to help increase sales?
“The old saying goes, ‘Good, fast, cheap. Pick two.’ Today, two of the three is no longer enough. You need to provide all three – a fast, reliable, and affordable (or free) shipping experience to win and keep a customer’s trust and loyalty, given all the other options are immediately available.”