Will Wal-Mart Stores, Inc. (WMT) Challenge Amazon.com, Inc. (AMZN)’s Prime Service?

Amazon.com, Inc. (NASDAQ:AMZN) introduced its prime service almost a decade ago. This member ship service has attracted a lot of consumers due to the perks provided for members at a modest annual fee. Many believe that this membership service has driven the Amazon.com, Inc. (NASDAQ:AMZN) to become the leading e-commerce company in United States. But, Wal-Mart Stores, Inc. (NYSE:WMT) has pledged to grow its e-commerce wing towards the end of the last year and as expected Wal-Mart Stores, Inc. (NYSE:WMT) has launched its membership program to compete against the likes of Amazon.com, Inc. (NASDAQ:AMZN) in the e-commerce segment. EasyPost CEO, Jarrett Streebin and Evercore Senior Managing Director Greg Melich talked on Bloomberg TV about Wal-Mart Stores, Inc. (NYSE:WMT)’s membership program and its effectivity against Amazon.

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The biggest question in everyone’s mind is that will Wal-Mart Stores, Inc. (NYSE:WMT) be a competition to Amazon? Streebin said that Walmart does 5 times the revenue of Amazon. He feels that Walmart has significant experience in moving goods around. He mentioned that Walmart moves around 2.5 times more goods than Apple does. The key difference in Walmart’s membership service will deliver the product in 3 days, when compared to the same delivery by Amazon.

“The important hook with 2 day is that you know when it is going to get there. Typical free shipping, you know when it is going to get there. The hook isn’t around the day, its around do you know when it is going to be there and so that’s what Walmart is optimizing for and its going to get there in three days and you know it,” Streebin said.

Melich feels that Walmart has a shot here in the e-commerce sector. He mentioned that Walmart is the world’s largest retailer with a lot of experience dealing with logistics. He feels that they need to figure out the last mile in how to deliver products efficiently. He said that Walmart can test its supply chain out this summer in delivering millions of orders within 3 days as promised. He mentioned that he would never count Walmart out when it comes to logistics.

Streebin thinks that consumers don’t care about same day delivery but they care more about reliability and he feels that Walmart can ensure the reliability part to consumers even though they deliver it in three days. Amazon charges $100 annual subscription for Prime membership whereas Walmart charges almost half, which Streebin feels might act as a catalyst in grabbing consumers. He accepted that Amazon has a lot of other perks like streaming options for the fee, which might work in their favor.

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