The retail giant is offering free delivery from its 4,700 U.S. stores as it attempts to win over homebound consumers during the pandemic

Walmart reported $514 billion in revenue last year, far beyond Amazon’s $281 billion. (Nicholas Kamm/AFP/Getty Images)

By

Abha Bhattarai

September 1, 2020 at 2:01 p.m. GMT+10

Walmart is taking on Amazon Prime with its own subscription program, one that will offer free deliveries and discounted gas to members, as the nation’s largest retailer attempts to win over homebound consumers during the pandemic.

Walmart Plus rolls out Sept. 15 and is the retailer’s most pointed effort yet to compete with Amazon’s wildly popular Prime program, which has ballooned to more than 100 million members since it was founded in 2005. (Jeff Bezos, the founder and chief executive of Amazon, owns The Washington Post.)

Walmart Plus members will receive unlimited free deliveries on orders from any of the retailer’s 4,700 stores across the country, and as much as 5 cents off each gallon of gasoline at Walmart, Murphy USA and Murphy Express fuel stations. They also will be able to use a “scan & go” feature in the company app that allows them to scan items as they shop and check out using Walmart Pay, the retailer’s mobile payment option.

“We are a company committed to meeting our customers’ needs,” Janey Whiteside, Walmart’s chief customer officer, said in a statement. “We’ve designed this program as the ultimate life hack for them.”

Walmart said more than 160,000 items — including toys, electronics and groceries — will be eligible for free delivery under the new program. Amazon, by comparison, offered more than 10 million items for free one-day Prime delivery as of late last year.

The service will cost $98 if paid annually or $12.95 month to month; Amazon Prime costs $119 annually or $12.99 month to month.

Amazon Prime, which began by offering free two-day delivery, has grown to include other perks, including on-demand movies and television shows, a music streaming service and video gaming platform.

The pandemic has boosted Walmart’s business and brought in many new customers who are turning to the retail giant for groceries and other necessities. Online sale jumped 97 percent in the second quarter, the company recently reported, lifting overall sales by nearly 6 percent.

Analysts say the retailer also has benefited from recent investments in its stores and fulfillment networks. Walmart picked up online market share from its biggest rival, Amazon, which has struggled with timely deliveries and other issues because of the novel coronavirus. Walmart’s e-commerce sales made up 5 percent of the overall U.S. online market in June, compared with 4.2 percent in January, according to data from Rakuten Intelligence. Amazon’s share of the market, meanwhile, slipped during that period, from 42.1 percent to 38.5 percent.

“When you look at essentials and grocery items in particular, those are areas where Walmart and Target have done very well during the pandemic,” said Sucharita Kodali, a retail analyst for Forrester. “These are areas where Amazon has not historically been as big of a player, so it wasn’t necessarily able to get as much of that merchandise — whether toilet paper or disinfecting spray — as it needed.”

Walmart reported $514 billion in revenue last year, far beyond Amazon’s $281 billion.

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The move comes just days after Amazon opened its first Fresh grocery store in the Los Angeles area, expanding its bricks-and-mortar presence in a challenge to traditional supermarkets and big-box retailers such as Walmart. The new store allows shoppers to fill their “smart carts,” which have sensors that can detect what’s inside, and bypass traditional checkout lines. Amazon has confirmed plans for a handful of other Fresh locations in Southern California and the Chicago area, which it said it will continue to operate and grow alongside its Whole Foods business.