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BizReport : Ecommerce : July 09, 2020

Expert: What Walmart+ launch means for ecommerce

This week, Walmart announced the launch of Walmart+ a new digital service that is set to compete with Amazon's Prime offering. Through the new subscription consumers can get same-day grocery delivery, fuel discounts and other perks for the annual fee of $98.

by Kristina Knight

Amazon Prime has long been a heavy hitter for ecommerce, and while other merchants and brands have rolled out their own ecommerce solutions, Walmart's new Walmart+ offering may be the first to truly compete with Amazon Prime.

"Membership programs create a great lock-in effect as consumers tend to shop more consistently where they have pre-existing accounts or subscriptions. A shopper is more likely to search for a product on Amazon if they have a Prime account, so this is a strategic play by Walmart to expand its own customer loyalty base," said Marcel Hollerbach, CMO, Productsup. "In the months following the rollout, I expect we'll see new digital services added by Walmart. A subscription program provides the company with access to the resources and outlets needed to build additional offerings around their retail business, such as online gaming or video subscriptions."

But it won't be easy for even Walmart, one of the biggest retail brands in the US, to unseat Amazon's stranglehold on the digital marketplace.
According to a recent DISQO report nearly half (40%) of purchases are now being made online and according to CGS' 2020 State of Ecommerce more than two-thirds (69%) of consumers are using sites like Amazon for non-essential purchases.

In 2018, Amazon's share of the US ecommerce space was at 49% according to BigCommerce. Walmart, by comparison, had a 3.7% share of the ecommerce space. Walmart has begun to pick up share, though, according to Bank of America, which notes that Walmart now holds a 7% share of the ecommerce space to Amazon's 44%

"Walmart's rollout of Walmart+ is yet another example of companies playing catch up to Amazon. Adding a subscription revenue stream proved to be a leading source of business for Amazon, especially after it raised the fees for Prime, so it was only time before we saw other large retailers follow suit with their own membership programs," said Hollerbach. "For Walmart+ to be successful, Walmart will need to offer services that are difficult for other players like Amazon to replicate, like discounts on gas. The retailer's large network of physical stores that are local and close to consumers is one competitive edge that Walmart should find ways to capitalize on."

Tags: Amazon Prime, Bank of America, ecommerce, ecommerce trends, m:commerce, mobile marketing, Productsup, Walmart+

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