Walmart [$WMT] rolled out their subscription service this week, taking yet another step closer to the ring against e-commerce Goliath, Amazon Prime [$AMZN]. On Wednesday, the retail giant announced it would begin to waive the $35 minimum purchase for orders placed on its website and free shipping for nonfood items. It’s no secret Walmart has the upper hand in the online grocery space, but in order to maintain their position, Walmart+ will offer perks for grocery purchases, as Amazon works to wrap its tentacles around the grocery sector. Trust me, Mr. Bezos didn’t just gobble up Whole Foods in 2017 on a whim— he’s far too meticulous for that.
Starting Friday, shoppers with a Walmart+ membership will receive next-day and two-day shipping for free, no matter the price. However, Walmart noted that certain items (groceries) will still require the $35 minimum. At $98 per year, Walmart+ subscriptions allow for free unlimited grocery deliveries (for orders above $35) along with fuel discounts and scan-and-go payment options for in-store shopping. There’s more than 11,000 Walmart store locations across 27 countries, and online sales are growing 40% YOY.
In addition, Walmart is expanding the number of Sam’s Club locations that will offer the Walmart+ fuel discount. Make no mistake, this calculated move was an expected one: Walmart said when it brought this program to market it planned to add fringe benefits in the near future. Moreover, blanket free shipping stood as the initial allure for Amazon Prime memberships—and remains a key feature for most users. Walmart reported strong Q3 results last month, and shares are up 28% YTD.
Walmart is a marketplace shrouded behind palatial walls, meaning that sellers must be approved before they can do business on the platform. Whereas Amazon is an ungated marketplace, so anyone can create a seller account and embark on their e-commerce hustle. Amazon’s approach contributed to its mammoth growth, but it also made it vulnerable to exploitation. Shiesty counterfeiters have long bedeviled brands on the Amazon platform— an issue that has even drawn attention form the Department of Homeland Security.