Walmart to launch Amazon Prime competitor - Business Insider - Business Insider

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The retailer is set to launch Walmart+ by the end of this month, Recode reports. The subscription will cost $98 a year and offer members free same-day delivery from Walmart stores as well as other delivery perks, discounts at Walmart gas stations, early access to promotions, and self-checkout tools.

The retailer will also introduce a Walmart+ branded credit card and possibly video entertainment. Walmart reportedly planned to introduce Walmart+ in March or April but delayed its debut, and it remains to be seen if it'll be launched nationally or regionally at first.

Walmart+ gives Walmart an answer to Amazon Prime that could help it steal customers from Amazon — but Amazon Prime is difficult to compete with. Amazon Prime costs $119 annually, so Walmart+ is less expensive, and if Walmart's offering wins over Prime subscribers it would help it gain ground on Amazon by taking some of its most valuable customers.

Prime subscribers have been found to spend more on average with Amazon than non-Prime subscribers, meaning Walmart could both steal these customers and possibly find that they will spend more than non-Walmart+ subscribers. But Walmart+ will surely have trouble prying subscribers away from Amazon Prime, which has accumulated over 150 million subscribers globally since launching in 2005 and offers a bevy of benefits that cover several mediums that subscribers have grown accustomed to having.

To win over Prime subscribers, Walmart+ will need to match Amazon Prime's most popular benefit and differentiate itself — and it may be positioned to do so.

Walmart+ can come close to matching Amazon Prime's ability to offer free and fast shipping — its biggest benefit. Eighty-three percent of Prime subscribers cited Prime's free two-day shipping as their favorite Prime benefit, per a Feedvisor report from early 2019. Amazon has since sped up its processes to offer free one-day shipping as well, in addition to its free same-day shipping via Prime Now.

This means that Walmart+ will have to offer similarly fast and free delivery speeds to compete with Amazon Prime, and its plan to offer unlimited free same-day delivery from its stores should help, though it may need to build out its product selection to keep up with Amazon. Walmart+ will also provide some level of access to its new 2-hour Express Delivery program, but it may not be free, potentially limiting its ability to win over Prime subscribers.

Walmart+ will also leverage Walmart's grocery and gas businesses, showing how Walmart+ could stand out to consumers. Walmart+ will reportedly feature free same-day grocery delivery, reserve delivery slots, offer notifications when slots open, and provide discounts on fuel at its gas stations.

Because Walmart is the leading US grocer, and since Amazon doesn't operate gas stations, Prime can't match the value these perks may have to consumers. This should help Walmart+ recruit subscribers, and the retailer would do well to bolster Walmart+ with other perks that lean on its unique position, like in-store perks that take advantage of its massive brick-and-mortar retail business.

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