Look out, Amazon — Walmart Readies Membership Program to Compete with Prime

July 25,2016
by Kristin Foster

Amazon Prime is a great deal for Amazon. Shoppers signing up for Prime spend more money at Amazon than average buyers and they pay the company for the privilege of free 2-day shipping. A collection of other benefits just sweetens the pot for Prime members. Purchasing the $99 annual membership is an easy decision for millions of online shoppers.

Look out, Amazon – Walmart Readies Membership Program to Compete with Prime

Editor’s Note:  For more details about Prime’s advantages, see Why Amazon Loves FBA.

It shouldn’t be surprising that other online selling outlets are experimenting with Prime-like programs of their own. The benefits of loyalty and the promise of higher per-customer spending are enticing.

 

Shipping Pass from Walmart

Walmart’s effort, reportedly called Shipping Pass, has been quietly rolled out for limited testing. The program will cost shoppers $50.00 per year and will include free fast shipping of 3 days or less. Shipping Pass will include merchandise described as “Best-selling Products” in categories such as baby, clothing, electronics, and health & beauty. No extra perks such as Prime’s e-book library or video streaming services have been mentioned.

Will customers abandon Prime in favor of Walmart’s version? Will the extra day of shipping make a difference? This remains to be seen. Some analysts predict Walmart may experience an increase in per-customer spending from Shipping Pass shoppers who are already Walmart loyalists. If a consumer has pre-paid for shipping via the membership fee they are likely to order sufficient merchandise to take advantage of their investment.

Luring Prime members away from Amazon isn’t likely to be quite as successful. ThoughWalmart’s catalog of products is extensive, there isn’t nearly the selection available at Amazon. Prime members have the further assurance the video streaming, music, and e-book benefits are probably worth the membership fees on their own. If shoppers only purchase a few items during the year they will still be getting a good deal with Amazon Prime. Walmart’s program lacks these bonuses.

eBay+ from eBay

eBay has also tested their own membership product in Germany. For a fee approximately equal to $17.00 – $22.00 US, eBay+ offers free, fast shipping and returns. It would seem to be more difficult for eBay to manage such a program. Unlike Amazon they don’t sell any merchandise themselves. Success of the program could rely heavily on the ability of eBay sellers to fulfill orders the same day they are received. eBay would reward sellers for their participation in eBay+ with enhanced product placements and discounted fees.

Amazon Prime has over 40 million members. The company, understanding the value of a Prime member, has stepped up advertising to attract even more buyers into the fold. The existence of other membership/free shipping programs offered by e-commerce retailers isn’t likely to have a great effect on Amazon’s ability to keep their most valuable customers enrolled in Prime.

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