Market Overview

Walmart To Launch Amazon Prime Competitor Service Next Month: Report

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Walmart To Launch Amazon Prime Competitor Service Next Month: Report

Walmart Inc. (NYSE: WMT) is planning to launch a subscription-based service similar to Amazon.com Inc.'s (NASDAQ: AMZN) Prime, Recode reported Thursday.

What Happened

The veteran Arkansas-based retailer has been working on the service called Walmart Plus for at least 18 months, sources familiar with the matter told Recode. Walmart could begin publicly testing the membership program as soon as March.

Walmart Plus would include features similar to that of e-commerce giant Amazon's Prime membership program, but the retailer aims it to be different enough to avoid direct comparisons, Recode noted.

Some of the new features could include the customers being able to place orders via texts, and discounts on Walmart's pharmacies and gas stations, per the report. The retailer could also bring back its "Scan & Go" service, which allows customers to check into Walmart without waiting in line.

Why It Matters

Walmart, while the second-largest e-retailer in the U.S., trails far behind Amazon in sales, according to Statista data.

The retailer faces more intense competition as Amazon enters the physical stores' race with its high tech Amazon Go stores.

Walmart had thus far repulsed the idea of subscription-based models. A similar service called ShippingPass that offered free two-day deliveries was launched in 2015, only to be quashed two years later.

The company currently runs a "Delivery Unlimited" program that comes with an annual fee of $98 and provides free grocery deliveries to the customers. The program was trialed in June last year, as reported by TechCrunch at the time, and launched at a nationwide scale as customers responded "favorably."

Price Action

Walmart's shares traded 0.67% lower at $109.66 on Thursday. The stock closed the regular session 2.97% lower at $110.40.

Amazon's shares closed the regular session 4.81% lower at $1,884.30 and inched another 0.76% lower in the after-hours session at $1,870.

Photo Credit: Public domain photo via Wikimedia.

 

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