Walmart Cooking up Amazon Prime Competitor

The membership system might include free shipping and other discounts

Why This Matters

If you shop online, you shop Amazon. Walmart, which still dominates the brick and mortar landscape, is a distant second to Amazon when it comes to ecommerce and a big part of that are the perks offered with Amazon Prime, the online retailer’s membership system. With Walmart+, the retailer hopes to attract more online consumers with similar, but also distinctive (more groceries and other areas Amazon can’t match) offerings at a similar yearly membership price.

Walmart has confirmed it’s working on a new consumer membership program called Walmart+, according to a new report in Recode. The service may launch in March and charge roughly $100 a year. The news comes just days after Amazon expanded its brick and mortar footprint with its largest cashless grocery store yet.

The big picture: Walmart is getting its hat handed to it in the online commerce space by Amazon, accounting for roughly 4 percent of U.S. online sales, while Amazon boasts 40 percent of all U.S.-based ecommerce. Part of what’s driving that success for Amazon is Amazon Prime. The $119-a-year membership system, which promises free, two-day shipping, discounts, streaming video, music, and more now has 100 million members.

Yes, but… didn’t Walmart buy online retailer Jet.com? It did but the retail giant lacks a cohesive membership program. It has one for groceries, which may be converted into the new Walmart+, but it will certainly offer more than food. The company may bundle in prescription discounts, and, according to the report, the ability to text in orders and pick them up without going through checkout.

By the Numbers

• Amazon Prime: 103 million users
• Total U.S. consumers spend online: $601.75 Billion
• Value of U.S. transactions on Amazon in 2019: $221.95 billion
• Walmart’s percentage of retail ecommerce in 2018: 4 percent

It won’t be easy. If (or when) Walmart launches Walmart+, it faces a steep ecommerce climb. Amazon has a massive lead in the market. Plus, the company created its own shopping holiday, Prime Day (which is now more like Prime Week), to further drive online revenues. It could be a while before Walmart can launch a Walmart+ Day.

Bottom line. Consumers will go where the best services and deals are and have fallen in love with the convenience of Amazon Prime, especially its two (or one) day shipping services. Walmart+ will have to match all that and more to successfully compete with Amazon Prime.