Jeff Bezos, founder and CEO of Amazon, recently revealed that he thought there was a “30 percent chance that Amazon would succeed.” He even told his parents that it was “very likely that they’ll lose their entire investment.” Nearly 26 years after its genesis in 1994, and Amazon has become the dominant player in the e-commerce industry. However, Walmart has recently upped the competition when it launched its own e-commerce business.
The decision to expand their online ordering services is largely a consequence of coronavirus’s pressure on the retail industry; no longer were people able to or willing to visit big box retail stores. Walmart saw that their online sales skyrocket during the pandemic and as such have steered their business towards expanding e-commerce.
In a similar fashion to Amazon, Walmart launched a subscription service that will cost $98 or $12.95 a month, and moreover offers same day shipping for order exceeding $35. When asked about the similarity the program has to Amazon Prime’s services, the CCO of Walmart Janey Whiteside, stated that “we’re not launching Walmart Plus with the intent to compete with anything else, we’re launching it to meet the needs of our customers.” She continued to say that Walmart Plus is a game changer: “we’ve designed this program as the ultimate life hack.”
An analyst at GlobalData says otherwise though. In a statement Neil Saunders expressed that “his sense is they are going to do a bit more to entice people into this, because as it stands it’s not a bad program but it’s not a great program. When you look at Amazon Prime, it’s just light-years ahead.”
Saunders continued his sentiment by further pointing out that the program may fail due to ‘subscription fatigue’. As more services become subscription based, people have already allocated their budgets to existing subscriptions. Adding and extra one on will not be feasible for many people.
Walmart’s decision to adapt to the ever-changing market system is indicative of the company’s innovative leadership. Walmart Plus serves as the perfect example for how a company can take a dismal situation—such as COVID-19—and pivot to make a profit. Many businesses fail due to their inability to adapt. As Seiler Tucker says, it is imperative for businesses to ‘AIM’: always innovate and market. Walmart is doing just this. Though only time will tell, Walmart Plus does have a fighting chance against Amazon Prime, so it will be interesting to see who ends up on top.