- The online dominance battle is on as Walmart revealed Tuesday the upcoming launch of a loyalty program based on subscription that offers free shipping.
The online dominance battle is on as Walmart revealed Tuesday the upcoming launch of a loyalty program based on subscription that offers free shipping as the world’s largest retailer explicitly challenges e-commerce behemoth Amazon.
The long-discussed Walmart would launch September 15, costing $98 annually or $12.95 a month to include free delivery with discounts on fuel and other services as soon as the same day.
The service will compete with Amazon’s “Prime” scheme, which provides free delivery within two days with a comparatively-priced subscription and also provides free and premium video and entertainment offerings.
Walmart’s announcement highlighted the need to meet customer needs in a rapidly changing environment, especially amid the disruption caused by the coronavirus pandemic, which has sparked a rise in tech adaptations for the world of work and shop at home.
“Life feels more difficult than ever before. Walmart is built to make things simpler — offering consumers the option of not having to compromise on cost or comfort,” said Janey Whiteside, chief customer officer of Walmart.
“We’ve always been a champion for the right item at the right price, but now it’s more than that. At the right moment, we even have the best shopping solutions.”
Walmart’s launch comes as the global retail giant has teamed up with Microsoft to purchase TikTok, the Chinese-owned short-form video app that President Donald Trump caught fire on.
The app was at the center of a diplomatic storm between Washington and Beijing since Trump signed an executive order on August 6 that gave Americans 45 days to stop doing business with ByteDance, the Chinese parent company of TikTok.
Walmart replaces the “Delivery Unlimited” subscription service from the retail giant which offered home delivery of more than 160,000 items.
It is the latest step in the major e-commerce ramp-up, driven by Walmart’s $3.3 billion purchase of Jet.com in 2016, and billions of dollars in additional investment to develop smartphone apps, revamp supply chains, and roll out curbside pick-ups of grocery stores and other items in thousands of US stores.
The new service will also provide discounts of up to five cents a gallon at Walmart petrol stations for members.
And it offers a “scan and go” feature allowing consumers to pay for items by scanning them for a “quick, easy, touch-free payment experience” with a smartphone application, “Walmart said on her website.
A successful acquisition of TikTok with Microsoft could open up additional possibilities, enabling Walmart to be a marketing tool for users of TikTok, who appear to be younger shoppers who turn to the internet for lifestyle trends and are usually not large customers of Walmart.
The potential gold mine of data from younger consumers could also help Walmart compete fiercer with Amazon’s online shopping competitor, analysts claim.
And TikTok’s acquisition could give Walmart a key platform for entertainment after earlier attempts stumbled. In April, Walmart’s Vudu video-on-demand service announced that Fandango Network, which is a part of Comcast, will be sold.
During the coronavirus pandemic, Amazon and Walmart experienced positive results as shoppers were increasingly dependent on e-commerce to purchase online groceries either for delivery or for curbside pickup.
Walmart has also benefited from its reputation as a “key” store that was allowed to remain open during spring lockdowns when other stores were forced to close by authorities.
Walmart posted higher quarterly earnings last month, thanks in part to a rise in US e-commerce revenue of 97 percent.
Walmart shares in morning trading jumped 4.1 percent to $144.62.