Walmart's Free Shipping: Don't Worry, You Can Handle It.

By now, it's safe to say, if you're an online retailer you've heard the news -- Walmart won't charge shipping on nearly 60,000 items ordered online through December 20. And you've also probably heard the protestations from purported protectors of small business.

But the Walmart announcement and reaction, as far as most small retailers go, probably doesn't require any response. The fact is, if it makes a difference to you whether Walmart charges for shipping, you are already in hot water and turning up the temperature somewhat won't cook your goose any sooner. Here's why:

It has never made sense for any but a few firms to compete with Walmart on price. That means total costs, including shipping. If Walmart cutting prices gives you a cold, in reality it has just exposed you as a case of walking pneumonia. A 2007 study of the effect of brick-and-mortar Walmart openings on existing retailers put it plainly: "In general, incumbents benefit more by differentiating themselves from Walmart rather than attempting to emulate Walmart."

Here's how to do that:

First, don't sell what Walmart sells. There are countless products, and even more services that Walmart does not sell. You can't get your roof replaced at Walmart. You can't buy a grand piano at Walmart. While you can buy bicycles at Walmart, you can't buy a high-end bike for a competitive triathlete. Plenty of businesses prosper selling things Walmart doesn't.

Second, if you must sell what Walmart is selling, dress it up with enough extras that it is, in effect, something different. Service offers one opportunity for differentiation. Walmart is justifiably famous for offering approximately no customer service when it comes to assisting and advising you on purchases. Shoppers who don't already know exactly what they want and why they want it have no business shopping at Walmart. It's as true at Walmart.com as in the stores. So, compete on information and consultation. Online, this can come in the form of detailed specifications, customer reviews, product comparison matrices and so on. Sure, some customers will use your information to decide, then buy from Walmart.com. But some customers who value quality over price will realize that you are more likely to be able to offer after-sale support, and buy from you.

Third, educate customers about total costs, including shipping. If your price is less than Walmart's, including shipping, you have to make sure customers realize that. Again, some buyers will always choose free-shipping offers. Others will total the price plus shipping and choose the lower overall number. Those are the ones you can appeal to.

Fourth, throw in an accessory a buyer really needs and wants, but which Walmart doesn't have, or doesn't throw in for free. If you're selling a karaoke machine, include a microphone stand. If you're selling a set of cookware, bundle a book of holiday recipes. You are not going to catch all customers with these options, but Walmart isn't going to catch all of them with its free shipping deal either.

Finally, look closely. Walmart isn't offering free shipping on everything it sells. If your product isn't on the list, you have no problem.

The old saw about a window opening when a door closes isn't always true. But it's true often enough that Walmart's free-shipping deal doesn't mean the end of the world.

Mark Henricks has reported on business, technology and other topics for The New York Times, The Wall Street Journal, Entrepreneur, and other leading publications. Follow him on Twitter @bizmyths.
Image courtesy of Flickr user D'Arcy Norman, CC2.0