Walmart (WMT) Stock Up 7%, Retail Giant to Launch Walmart+ to Compete with Amazon Prime

UTC by Godfrey Benjamin · 4 min read
Walmart (WMT) Stock Up 7%, Retail Giant to Launch Walmart+ to Compete with Amazon Prime
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Walmart is set to launch its loyalty-based subscription program called Walmart+ this July. It will compete with the Amazon Prime service. WMT stock jumped 7% yesterday.

The surge experienced by most retail outlets during the coronavirus induced lockdown has expedited the rollout of new products and services. Companies who have particularly digitized their products and services were among the top gainers as consumers’ online transactions increased significantly. Walmart Inc (NYSE: WMT) is preparing to launch Walmart+, a loyalty service initiative in response to consolidate its sales growth during the national lockdown. Walmart+ aims to compete with Amazon Prime service launched in 2005 and has attracted a customer base of over 150 million. With the revamping of Walmart’s online services, online shopping customers are about to get a viable alternative to the well-acclaimed Amazon’s offering.

The report about the recent launch which first appeared on Vox Recode has caused the shares of Walmart Inc (NYSE: WMT) to surge by almost 7% on Tuesday to close at $126.95. At the time of writing, in the pre-market, WMT stock is another 0.81% up.

Walmart+ is scheduled to roll out in July after the initial plans to launch the service in late March/April got distorted due to the coronavirus.

Walmart’s Journey

Walmart is an American multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores, and headquartered in Bentonville, Arkansas. The company was founded by Sam Walton in 1962 and incorporated on October 31, 1969. It also owns and operates Sam’s Club retail warehouses. As of April 30, 2020, Walmart has 11,484 stores and clubs in 27 countries, operating under 56 different names.

Walmart is a world-renowned brand that was declared the world’s largest company by revenue ($514.405 billion) in 2019 by Fortune Global 500. As a global brand, Walmart has always devised initiatives to stand different in its product offering and divestment portfolio. Always rising to the occasion to beat the competition, Walmart has acquired some key businesses overtime to consolidate its position as it boasts of today.

Always moving to improve its rate of delivery, Walmart acquired Parcel, a technology-based, same-day, and last-mile delivery company in Brooklyn On September 29, 2017. In May 2019, Walmart announced the launch of free one-day shipping on more than 220,000 items with a minimum purchase amount of $35. The initiative first launched in Las Vegas and the Phoenix area. The current plans for Walmart+ are the company’s effort to offer elite services to its proposed subscribers.

How Walmart+ Will Compete with Amazon Prime

Walmart+ is a subscription-based service that will cost $98 per annum. With the subscription, customers will enjoy same-day delivery of groceries and general merchandise, discounts on fuel at Walmart gas stations, and early access to product deals. The proposed price of the service will serve as a boost for customers to boycott Amazon Prime which currently goes for $119 a year. As a response to customer’s failure at securing shopping slots during the pandemic, Walmart+ will give customers access to reserve delivery slots as well as open-slot notifications. Also, a limited two-hour express delivery option will also be available.

As noted by Vox Recode, WMT executives are particularly creating measures to launch Walmart+ such that customers attach enough values to subscribe to the program while also offering completely different products and services that will eliminate a side by side comparison with Amazon Prime. When launched, it is expected that Walmart will create several unique products that will be available only to its subscribers as compared to the general user of its app and websites.

Good Time to Launch?

The number of COVID-19 cases in the United States of America keeps rising in some states. While it is unclear what extreme measures the government will take to slow this spread, the situation may force another lockdown in some states, if this happens, the relevance of Walmart+ will come handy as online service demand will rise again. In all, the U.S. economy is bullish and a positive initiative at this time can cause a remarkable upshoot in future WMT stock performance.

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