The online dominance battle is on as Walmart revealed Tuesday the upcoming introduction of a membership program that offers free shipping as the world’s largest retailer aggressively challenges e-commerce powerhouse Amazon.
The long-discussed Walmart would launch on September 15, costing $98 annually or $12.95 a month to include free shipping and discounts on fuel and other services as soon as the same day. The service will compete with Amazon’s “Prime” platform, which provides free shipping within two days with a comparatively-priced membership and also provides free and premium content and entertainment services. The announcement from Walmart highlighted the need to meet customer needs in an economy that is evolving rapidly, particularly amid the coronavirus pandemic, which has fuelled an increase in tech adaptations for the world of work and shop at home.
During the coronavirus pandemic, Amazon and Walmart enjoyed strong results as consumers were increasingly relying on e-commerce to order online groceries either for delivery or for curbside pickup. Walmart has also benefited from its status as an “essential” store that was allowed to remain open during the lockdowns, while other stores were forced to close by authorities.
Walmart initially intended to launch Walmart+, naming it internally a Delivery Unlimited rebrand, according to a person familiar with the proposal, but postponing the launch due to the latest coronavirus. They hope that the new program will appeal to busy customers and add more benefits in the coming months, , Janey Whiteside, Walmart’s chief customer officer said, In research, Walmart customers with a subscription spend more and shop with the store more frequently. Some market observers see Walmart’s ability to create another source of profitable sales by membership with Walmart+, though it’s unclear how successful the service will be. All current Delivery Unlimited customers will automatically become Walmart+ customers, said Ms. Whiteside.
The successful acquisition of TikTok with Microsoft could open up additional possibilities, letting Walmart be a marketing platform with users of TikTok, who tend to be younger shoppers who turn to the internet for lifestyle trends and are generally not large customers of Walmart. Walmart reported higher quarterly earnings last month, due in part to an increase in US e-commerce sales of 97 percent. Walmart shares jumped 4.1 percent to $144.62 in morning trading.