Wal-Mart Stores, Inc. (WMT) to Compete with Amazon.com, Inc. (AMZN)’s Amazon Prime


Though Wal-Mart Stores Inc. (NYSE:WMT) and Amazon.com, Inc. (NASDAQ:AMZN) are in different league, the offer of unlimited shipping service has become a big factor to lure the customers. The growth in online shopping could not resist even the biggest retailer in the world to shift its focus towards web-based shopping with mobile shopping assuming greater significance. As a result, competition has become a tough proposition to stay put in the sector.

Head-On

For quite some time, Amazon.com, Inc. (NASDAQ:AMZN) appeared to be having a solid run with its Amazon Prime offering unlimited shipping service throughout the year. Having seen the success, it was obvious for Wal-Mart Stores Inc. (NYSE:WMT) to test a similar service at a competitive price point so that it could not only retain its customers but also attract more customers. In any case, it is quite unlikely that the price point would be more than $50 a year. The company might have felt that providing the service could ensure the completion of the shopping process for its customers.

The biggest retailer is not willing to offer the service to everyone now but on a selected basis through an invite-only process commencing from this summer. The company plans to offer over one million products under the free delivery scheme in three days or even less.

Yet To Name

Wal-Mart Stores Inc. (NYSE:WMT) is yet to name the service though it was preparing to unveil the beta in the upcoming weeks. Only a subset of the products that the biggest retailer sells through online would be eligible for free shipping. Such products would be labeled on the website so that customers would be in a position to identify it.

In all, the company provides more than seven million products for sale through online. However, during the trial run, it would make available only a little over one million items for free shipping. Wal-Mart appears to be not willing to commit itself to offer the services to a wider section of the public. However, it seems that the company was positioning this service like any other trials it currently does so that it would be in a position to collect data about customer interest and so on.

More Experiments

Over the years, Wal-Mart Stores Inc. (NYSE:WMT) was involved in running several e-commerce experiments. This ranged between subscription-based sample boxes and local grocery delivery. Though some of the tests were not panned out, the company continued to experiment with its test in both local store pickup, as well as, home delivery of groceries in select places.

The latest move was reportedly not to place the service as an alternative to Amazon.com, Inc. (NASDAQ:AMZN)’s Amazon Prime. However, Wal-Mart Stores Inc. (NYSE:WMT) wanted to gauge the interest of the customers in case the service is provided at a lower-price point. Amazon Prime has proved it ensured quick delivery.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.
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