Although Walmart might prefer to avoid a direct, head-to-head comparison, it’s hard not to consider the offerings involved in its new Walmart+ program as a direct response to both the successes and the vulnerabilities of Amazon Prime. So regardless of what the retailers might prefer, let’s compare them.

	Walmart+	Amazon Prime
Cost (annual)	$98	$119
Delivery speed	Same day (free) Two-hour (select items)	Two-day (free) Same-day (free in select locations) Two-hour (select locations)
Distinct offerings	Extensive grocery offerings	Extensive video, music, and entertainment library
Discounts	Specific promotions for members Fuel at Walmart-owned gas stations	Specific promotions for members Reduced prices at Whole Foods

Thus Walmart+ offers some benefits over Amazon Prime, though it cannot compete in terms of streaming entertainment content. It also arrives with a lower price point, which might be of particular appeal to its traditional target market of price-sensitive shoppers.

These shoppers have become an increasingly appealing target market for Amazon though, which has adjusted its Prime memberships to offer discounted rates for low income consumers, as well as monthly payment plans. As a result of such efforts, more than half of the consumers that Walmart identifies as its top spenders also have Prime memberships. Furthermore, Prime has a good head start; it was first introduced nearly two decades ago.

But Amazon Prime is not unassailable. Especially in the COVID-19 era, consumer complaints, citing the company’s failure to meet the expectations it had created through its service promises, soared. The early days of the pandemic represented a unique time, rather than the norm, but people who feared venturing out to stores still found themselves angered by Amazon’s inability to fill their orders within the promised two-day window or ensure sufficient supply of critical grocery items.

In this context, Walmart sees a clear window of opportunity. It had initially planned to launch Walmart+ in March but, when confronted with the challenges of COVID-19, pushed the strategic initiative back a few months. That move seemingly was the right choice, in that it enabled the retailer to focus on ensuring the effectiveness of its existing operations. According to customer satisfaction polls, the Walmart delivery services in place, even before the introduction of Walmart+, performed better than Amazon’s in getting products to consumers who were determined to remain socially distant and out of stores.

As they grow more accustomed to delivery options, price-sensitive shoppers might also come to appreciate the efficiency promised by Walmart+ even more, including reduced fuel costs for them and rapid provision of groceries and household items with added deals and incentives. Its online sales already increased by 74 percent during 2020.

Discussion Questions:

1. Do you have an Amazon Prime membership? Do you plan on purchasing a Walmart+ membership, either in addition or instead of Prime?
2. Why might Walmart have been able to perform better in its delivery operations during the recent pandemic, compared with Amazon?

Source: Jason Del Rey, “Walmart’s Amazon Prime Competitor Will Launch in July,” Vox, July 7, 2020; George Anderson, “Will Walmart’s Best Shoppers Ditch Amazon Prime for Walmart+?” Retail Wire, July 8, 2020; Tom Ryan, “Will Walmart’s Customers Pay $10 More to Get Deliveries in Two Hours?” Retail Wire, May 4, 2020.