Walmart announced that it will test a new unlimited shipping service this summer for its online shoppers that will undercut Amazon’s $99 per year Prime service.
The retail company said that for an annual subscription fee of $50, it will deliver the items purchased through its website within three days. The announcement was confirmed by a report by The Information.
The service, codenamed “Tahoe,” is an attempt to expand Walmart’s e-commerce business. Although the company has declared that the availability of the service is on an invitation basis and that it is geographically bound, the markets that will benefit from the program were not disclosed.
Company spokesman Ravi Jariwala told CNET, “We will have a closed beta we will initiate later this summer.
“This is just one of many tests we have going on,” he said, noting the company’s grocery-delivery program.
At present, Walmart has a delivery and pickup service for groceries in five markets. Its online business has seen a deceleration lately, which it hopes to recover through the unlimited shipping program.
With the test, Walmart also aims to divert a larger share of the online sales market belonging to Amazon in its direction. Amazon is currently one of the largest online retailers.
Walmart’s unlimited shipping service also aims to rival Amazon Prime, the delivery service that was launched 10 years ago.
Amazon Prime had 40 million U.S. members at the end of last year, an increase of 11 million from the third quarter, according to the data from Consumer Intelligence Research Partners. Estimates show that an average Amazon Prime customer spends $1,500 annually on the e-commerce site, while non-members spend $625.
Through Walmart’s new service, customers will be able to purchase more than 1 million items from its website.
According to USA Today, Jariwala stated that the service does not include additional features like music streaming and free video, which are offered by Amazon. Being in its test phase, the progress of the service will depend on customer feedback.
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