Amazon offers free shipping on small items

Take that, Walmart.

Amazon is upping the ante on the free and low-cost shipping wars.

The nation's largest online merchant is introducing free shipping on thousands of hot-selling items across product categories, from smartphone accessories to makeup, waiving a minimum order requirement, Bloomberg reported.

The program, dubbed "Fulfillment By Amazon Small and Light," includes products that cost $10 or less and weigh 8 ounces (230 grams) or less.

The news follows Walmart's announcement last month that it would test a new unlimited online shipping service this summer for $50 per year, undercutting Amazon's annual $99 Amazon Prime shipping program.

"Fulfillment By Amazon Small and Light" will be available to all shoppers—not just those subscribed to its Prime membership program—in what's viewed as a bid to woo the value-minded consumers that competitors Walmart and eBay are targeting.

Indeed, eBay is testing a subscription-based program in Germany, called eBay+, which offers free, fast shipping and returns for customers, the Wall Street Journal reported.

Amazon began testing its "Small and Light" program three months ago. The pilot revealed that items offered without a minimum order requirement sold faster than they had previously. Shoppers not enrolled in Amazon Prime must ring up an order of at least $35 to qualify for free two-day delivery.

"Customers love that even if it's a $5 item, shipping is free for everybody, Prime or not," Neil Ackerman, a senior manager at Amazon, told Bloomberg.

"If the key metrics are volume, penetration and market share in household item categories, offering free shipping is the right thing to do," Susan Lee, who runs the consumer goods and retail practice in North America for Simon-Kucher & Partners, told FierceRetail.

The retailer is also looking to retrain shoppers in buying household goods, she said.

"By offering free shipping, Amazon can remove one of the barriers for consumers to buy everyday household items online, versus being part of their weekend grocery-shopping trip. I believe this is part of Amazon's strategy, together with the Dash buttons, to change consumers' shopping behavior with these everyday household items." 

With this move, Amazon is also giving brick-and-mortar chains yet another reason to distinguish their shopping experience and merchandise mix, Lee said.

"Amazon is raising the ante for traditional brick-and-mortar retailers selling these categories. To better compete, the traditional retailers will have to invest in the human touch, the shopping experience, and unique offerings, product discovery. Just stocking national brands at a good price is no longer good enough."

For more:
-See this Wall Street Journal article
-See this Bloomberg Business article

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