In its second-largest acquisition, Amazon buys the company for $970 million.
With a $79 membership fee, customers can receive free standard shipping from Sears and Kmart.
Sears Holdings Corp. is increasing the prominence of ShipVantage, its little-known direct challenge to Amazon.com’s Amazon Prime membership program.
The program costs $79 annually and gives consumers free standard shipping on all purchases from the Sears or Kmart e-commerce sites, though ShipVantage excludes marketplace sellers, which are other retailers that sell through Sears.com and Kmart.com. ShipVantage consumers also can upgrade their deliveries to expedited shipping for 99 cents and to premium shipping for $3.99.
Sears has set no minimum purchase requirement for ShipVantage customers; however, the program excludes items such as furniture, appliances and mattresses that require the customer to set a specified time of delivery.
That model resembles the one used by Amazon Prime, which costs $79 annually and gives consumers free standard shipping on all purchases made directly from Amazon.com, but excludes purchases made from Amazon marketplace sellers that fulfill their own orders.
However, because the program excludes all marketplace sellers, it isn't as robust an offering as Amazon Prime, says Eric Best, CEO of Mercent Corp., which helps retailers sell through such online marketplaces as Amazon and eBay.
Sears is only the latest membership service to take on Amazon. For instance, ShopRunner, a shipping alliance among more than a dozen e-retailers including Toys ‘R’ Us, the Sports Authority and GNC, launched last month. And both Borders and Barnes & Noble earlier this year launched shipping-related offers tied to their store loyalty programs.
While Sears’ program may find a narrow niche, its reach may be limited because of the limited assortment of products on Sears.com and Kmart.com eligible for the program, says Fiona Dias, executive vice president of strategy and marketing for GSI Commerce, which launched ShopRunner.
“One thing that we heard from Amazon Primer customers when we were developing ShopRunner is that they were a little frustrated because the marketplace items were not included,” she says. “Any single retailer program faces that same issue in that there isn’t a wide enough assortment of products.”
Sears is No. 8 in the Internet Retailer Top 500 Guide.