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Tuesday, September 29, 2020

Walmart’s challenger to Amazon Prime will launch in two weeks

Walmart Inc’s answer to Amazon Prime finally has a launch date.

By: Bloomberg | Updated: September 1, 2020 12:58:08 pm
microsoft tikotk, walmart shares, walmart to buy tiktok, tiktok shares, tiktok bannedWalmart's answer to Flipkart is coming in two weeks

Walmart Inc’s answer to Amazon Prime finally has a launch date.

The new subscription program, dubbed Walmart+, will be available on Sept 15, the world’s largest retailer said in a statement. The program costs $98 a year, a discount to rival Amazon’s $119 annual Prime membership, and includes unlimited free delivery — including on groceries — plus gasoline discounts.

“We’ve tried to make a membership that makes it easier for customers to shop, manage their daily lives, and to manage their pocket books,” Janey Whiteside, Walmart’s chief customer officer, said in an interview.

The roll-out heightens Walmart’s competition with Amazon as retailers of all types try to capitalize on soaring consumer interest in e-commerce during the pandemic. Walmart has picked up millions of new customers in recent months thanks to its low prices on food and essentials, a ubiquitous brick-and-mortar store network with 4,700 locations, and improvements to its online division, which nearly doubled its U.S. revenue last quarter.

The service, which includes some delivery options as fast as same-day, will also help it maintain its dominance in grocery. Although Walmart is still by far the nation’s biggest grocer, it has recently lost share to mainstream supermarkets, which have expanded sales at a faster pace during the quarantine. Walmart+ expands on an existing grocery-delivery subscription that Walmart introduced last year.

“During the pandemic, we’ve seen the way that customers shop evolve more rapidly than ever,” Whiteside said. The new service will help customers “lift the cognitive load” and keep more money in their pockets. “We consider it a life hack.”

Walmart+ had earlier been expected to launch in July, a person familiar with the plans said at the time, although the company itself hadn’t announced an official date. The unveiling comes several months after pantry stockpiling hit its peak and several weeks too late for much back-to-school shopping.

Walmart has tried to mimic Amazon Prime before, testing a program called ShippingPass that it shuttered in 2017. The fees from a monthly subscription service could help boost the profitability of Walmart’s U.S. e-commerce business, which generated $21.5 billion in sales last year but was nonetheless in the red.

It’s a busy time for Walmart on the digital front, as the company confirmed last week that it’s partnering with Microsoft Corp. in an effort to purchase the U.S. operations of social-media giant TikTok. Walmart has already been rethinking its online operations, shuttering the e-commerce site earlier this year and selling several brands to help bring cohesion to its offerings.

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