How Can Walmart Compare with Amazon Online?
In the latest fight and desire to not let Amazon win the online game, Walmart is announcing its new Walmart+ service for paying members, which is Walmart’s direct answer to Prime’s capabilities and popularity.
The program has been in the development for that past 18 months and is now ready to be tested in some markets. It will be a replacement for the current Delivery Unlimited Service, where online shoppers paid $98 per year to get groceries delivered without limits and on that same day. In addition to delivery, Walmart plans to include prescription medication and gas discounts, and Scan & Go option for fast check out.
Amazon Prime currently costs $119 per year and includes not only free 2-day delivery, but also a huge collection of movies and TV shows. Over 10 million products of all categories are eligible for this service that is currently enjoyed by over 150 million cshoppers world-wide.
Amazon is the biggest online retailer in the US with its 38.7% of ecommerce market hold, while Walmart is in the second place, but trailing way behind with its 5.3% market share. The retail giant has a long way to go if it wants to come closer to Amazon’s achievements.
Walmart has been seeing growth for its online operations, but the trend is slowing down in the past year. Yes, ecommerce sector is still expanding, but not at a speed that it did last two years. For example, the current forecast for rise stands at 30% for this current year, but last year it was 37% increase. Online sales gains were at 35% recently, but this is the lowest number in the last couple of years. If Walmart wants to continue growing and taking more customers and sales from Amazon, it better get a huge number of customers to sign up for the new Walmart+ program.
We have to give credit to Walmart for trying to adjust to current market moods and streamline its physical stores’ operations with a huge internet shopping potential. The world’s largest retailer is merging its in-store and online buying teams for better communication and unanimous policies. Last year Walmart chose to merge all teams at Jet.com – retail, marketing, technology, analytics, and product. All of that became a separate online business entity. Jetblack personal shopping branch was shut down.
So changes are happening and more are coming, but Amazon is also not asleep on its laurels. They are rolling out more and more products that are now delivered by their own Mercedes truck fleet. Beating that is a tough cookie even for giants like Walmart.
The main obstacle is the fact that people often associate Walmart with lower quality and customer service, which has definitely been the case in the past. Amazon is regarded as a fast service business and marketplace, but many people are getting disillusioned with them lately because of rising prices and decreasing customer service quality. Who comes out victorious will be determined in the future, but at the mean time we, the consumer, can take delight and enjoy new services and perks almost monthly.