Walmart Attempts to Surpass Amazon Prime

In a bid to outscore archrival Amazon’s $99 Prime services, Walmart is set to test its $50 unlimited shipping service for its online customers, this summer.

Walmart Stores Inc., the retail giant is trying to ape Amazon’s success, by bringing the opportunity of getting products in a maximum of three days. As of now, owing to this being a pilot test, the portfolio of goods that qualify for three-day delivery has been kept limited. About 14 percent, that is, one million out of the seven million items available on Walmart’s website, are covered under this service.

This unlimited online shopping service, basically, lets customers buy goods from Walmart’s website at an annual subscription fee of $50, with an assured three-day delivery. The current, preliminary phase would serve a limited geographical area and include customers only by invitation.

This effort by the grocery chain is an attempt to seize a larger market share, which has been till date dominated by the largest online retailer, Amazon.com Inc. Amazon launched its ‘Prime’ shipping service a decade back, wherein it offered the benefits of seamless delivery to the online customers for the first time. The only difference being that, Amazon Prime charges $99 as the annual subscription fee and ensures two-day delivery for its prime customers.

Amazon claimed that its Prime customers increased by 50 percent in the last year. According to reports by the Customer Intelligence Research Partners (CIRP), as of 2014, Amazon Prime had as many as 40 million US members, exceeding the estimated 29 million by 11 million, at the end of Q3. CIRP also maintained that, on an average, an Amazon Prime member spends $1,500 per year on its website, in contrast to $625 for nonmembers.

The current move by Walmart can sure cause Amazon sleepless nights, but only if the pilot phase turns out to be a success.