Wal-Mart Stores, Inc. (NYSE:WMT) is all set to roll out a new shipping service that will be much cheaper than the Amazon.com, Inc. (NASDAQ:AMZN) Prime service. As the company gets ready to compete with Amazon with the launch of an unlimited shipping service at $ 50 per year, Amazon still has an advantage. The Amazon Prime customers get shipping with additional benefits like high-speed delivery, great discounts and host of other offerings that Wal-Mart may offer over time.
A Wal-Mart spokesperson Ravi Jariwala said the company was going to launch the service on the basis of invitations for a start, and once it gains momentum, the shipping offer will be made public. No information was provided on the target markets for the select invitation program by the company. Over 1 million products, ranging from clothes, sports equipment, electronics, and others, would be made available to customers in a timeframe of less than three days of being ordered. This seemed to be too low in comparison to the over 20 million products that the Amazon Prime customers can order.
Retailers Vs. E-Commerce
The latest launch by Wal-Mart is aimed at making the retailers more dominant in the markets that the e-commerce companies have so easily evaded and taken over. Currently, Amazon charges around $99 per year for a Prime membership, and this also gives them video and music streaming benefits.
Amazon has reported an upsurge of over 50% new memberships in 2014 and the numbers are anticipated to grow even more in 2015. Also, the company has been offering new features to boost the membership of the Prime services, and the most recent addition is the ‘same-day delivery’ option that is available across U.S.
Competing with Amazon is going to be a tough battle for Wal-Mart as the former has already established a stronghold in the market and has no plans of relenting. Amazon has 68 fulfillment centers in North America as compared to only five of Wal-Mart, and the former is also more technologically advanced, using robots to process customer orders.
Analysts feel that Wal-Mart Stores, Inc. (NYSE:WMT) may benefit from the latest venture, but its vision to take over Amazon seems to be a far-fetched dream as of now.