Walmart is challenging Amazon with a new shipping service. Although Amazon has aggregated a loyal user base for its Prime service, which costs $99 per year, Walmart plans to only charge consumers a $50 annual fee.
Although Walmart is undercutting Amazon with its annual fee, there is a minor difference in delivery speed. Amazon Prime promises to have orders delivered in two days or less, Walmart reported that orders will be delivered to participating consumers in approximately three days.
“One of things that we’ve heard from customers is that they want shopping that’s predicable and they want it to be affordable,” Ravi Jariwala, a Walmart company spokesperson told TechCrunch. “[This test is] really to understand is this yet another new way that we can serve customers?”
Amazon has a loyal base of Prime members due to its breadth of inventory and services. U.S. Prime memberships grew 50% last year, according to Reuters, and more than 20 million items on the e-Commerce site are eligible for free delivery. Amazon Prime members also gain access to music and video streaming, as well as a Kindle Lending Library at no extra charge.