Walmart Doesn’t Need an Amazon Prime Killer, Nor Can They Actually Launch One
So there’s a story going around today that Walmart is working on an Amazon Prime competitor. Code named Tahoe, the service would cost $50 and offer free shipping on up to a million items sold on Walmart.com.
Wal-Mart Stores Inc. will test a new unlimited shipping service for online shoppers this summer that will be priced below Amazon’s $99 per year Prime service.
Wal-Mart, the world’s largest retailer, told The Associated Press on Wednesday that the shipping subscription service will cost customers $50 a year. Products will arrive in three days or less.
My mother swears by Walmart, so I ran this story by her to get her opinion and see if she would pay $50 a year to get free shipping.
Nope. She already gets free shipping from Walmart.
She just has to spend $50 or more and then wait a week, which is no hardship. I mean, do you know realize easy it is to buy $50 worth of consumables like toilet paper and detergent?
True, Amazon will give you free shipping on orders totaling more than $35, but that only applies to eligible items. Walmart’s offer covers almost everything on the website (with certain obvious exceptions like tires, photo, pharmacy).
Folks, just about the only reason Walmart could need this program is not to compete with Amazon on fast shipping but to capture more hype.
This program isn’t going to draw any loyal Amazon customers away; we’re already signed up for Prime and are happy with it. It also won’t boost Walmart’s online sales (which continue to grow more slowly than Amazon) because Walmart’s problem isn’t how little people are spending there but whether consumers even think to shop there.
The real reason Walmart’s online sales lag Amazon’s sales is that Amazon has the buzz and Walmart does not. Amazon gets lots and lots of free coverage on tech and business blog as the hot new prospect, while Walmart is the stodgy old boring retailer.
The buzz, or more specifically the free publicity it entails, is the real reason Amazon revenues continue to grow while Walmart stagnates at over six times Amazon’s size. Consumers are constantly reminded about shopping at Amazon, while Walmart is still viewed in terms of their physical stores.
If this program helps Walmart build buzz then the retailer’s online operation will get more attention and thus more sales. If not, no one will know about the program much less use the program.
Do you suppose this is going to help?