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FILE PHOTO: The Amazon logo is visible on a package in the warehouse of the Amazon Distribution Center in Saran, near Orleans, France, on November 22, 2016. REUTERS / Philippe Wojazer
(Reuters) – Amazon.com Inc (AMZN.OMonday said it would offer free delivery with no minimum purchase for the first time this holiday season, exacerbating competition with Walmart Inc. (WMT.N) and other rivals competing for Christmas purchases from their customers.
The US-only promotion, effective Nov. 5, removes the $ 25 minimum that customers outside the Amazon Loyalty Club must receive free shipping. The contract lasts until Amazon can no longer promise items in time for Christmas with free shipping, which usually takes five to eight business days.
This announcement could help Amazon maintain its rapid sales growth. Last month, shares of the world's largest online retailer had been beating after a forecast of the smallest increase in sales since at least early 2016. The current quarter is generally the largest of Amazon.
Amazon reduced its minimum order amount for free shipping to $ 25, up from $ 35 indefinitely in May 2017.
Monday's news will put pressure on Walmart and Target Corp.TGT.N), which over the last few years have shattered Amazon's advance with their own free shipping offers in two days. While Walmart has maintained its $ 35 ordering threshold this holiday, Target has removed its minimum until December 22nd.
Just over half of US households have a premium subscription, analysts say. Prime remains the cornerstone of Amazon's commerce, as buyers buy more from the retailer once they have paid $ 119 for a one-year membership. The benefits include same-day shipping and video streaming.
Amazon is now courting those who are not part of the club, hoping that its brand and a wider selection will distinguish it. Free shipping can apply to hundreds of millions of items on Amazon as opposed to hundreds of thousands on Target. Target promises to deliver the items faster.
It was unclear how the impact of free shipping on small items would have an impact on Amazon's net income, which touted the efficiency gains made last month.
According to the latest annual report of the Seattle-based company, shipping costs nearly doubled from 2015 to 2017, reaching $ 21.7 billion.
Report by Jeffrey Dastin in San Francisco; Edited by Sonya Hepinstall
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