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Walmart tries to undercut Amazon Prime with cheaper subscription service

Walmart tries to undercut Amazon Prime with cheaper subscription service

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$98 a year for free delivery on orders over $35, but far fewer extras

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Photo by ANDREW CABALLERO-REYNOLDS/AFP via Getty Images

Walmart is trying yet again to take on Amazon Prime with its own delivery subscription service. The new service, which launches September 15th, is named Walmart+ and costs $12.95 a month or $98 a year, compared to $119 for Amazon Prime.

For that price, subscribers will get unlimited free deliveries from stores on orders over $35. More than 160,000 items are covered by this, including fresh groceries and household essentials. Walmart says these deliveries can be “as fast as same-day,” but it seems delivery speed will depend on what exactly is in each order.

Subscribers will also get fuel discounts at affiliated gas stations worth up to five cents on the gallon and the option to shop in store using Walmart’s Scan & Go mobile app. This lets customers scan items as they shop and pay through their phone. Walmart+ does not include free delivery for the far larger range of items available at Walmart.com, though many of these already include free two-day delivery for orders over $35.

This isn’t Walmart’s first delivery subscription service

Walmart+ isn’t entirely a new project for the retail giant. Last year it tested a similar service named Delivery Unlimited that also offered free grocery deliveries for $98 a year. As reported by The Wall Street Journal, Walmart+ was originally discussed internally as a rebrand of Delivery Unlimited, with plans to launch in the spring. These plans were delayed by the pandemic. Existing Delivery Unlimited subscribers will be inducted into Walmart+.

Market analysts have long suggested that a Walmart subscription service could attract millions of customers and provide regular revenue for the company. However, it’s not clear if Walmart+ can compete directly with Amazon Prime. Amazon’s subscription service is costlier but offers a far wider range of benefits, including access to the company’s streaming service, Amazon Prime Video, as well as Twitch Prime, Prime Music, free photo storage, and Prime Now, which offers one and two-hour delivery on certain items. Unlike Walmart+, Prime does not have a minimum purchase amount to qualify for free delivery.

Walmart says it will be adding new perks to Walmart+ in the coming months, but its initial offering may fail to attract a significant amount of customers. “For a $35 minimum and $98 annual fee, this is a thin gruel,” Craig Johnson, president of retail consulting firm Customer Growth Partners, told The New York Times.

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