Amazon launched a $99-a-year shipping service called Prime a decade ago, guaranteeing its customers a standard, reliable, two-day shipping for online orders. The service has then proven itself very effective and strategic for the e-commerce giant, as it has helped Amazon become the undisputed leader in online shipping in the U.S.
In fact, Prime has become the cornerstone for the company's growth during the last 10 years. The e-commerce company has stated that U.S. Prime memberships has grown by 50 percent last year, according to Reuters.
However, Wal-Mart may be developing something that can take on Amazon Prime, providing it its most significant challenge yet.
Wal-Mart's response to Amazon Prime follows a subscription-based, fast-shipping service, which is geared towards improving the company's online business. At $50 a year, the price of the service is distinctly less than that of Amazon prime.
The service, dubbed "Tahoe," comes after a multi-year software overhaul for Wal-Mart's e-commerce business, according to The Information. Tahoe was actually supposed to be launched last year prior to the holiday season, but the company has opted to move its release back later this spring or early this summer.
Ravi Jariwala, company spokesman for Wal-Mart, stated in an interview that the service will offer a reliable three-day shipping period for orders that are processed in the company's website. There are currently over 7 million products available at Wal-Mart's online store, according to Reuters.
"Depending on customer feedback we will see how the programme evolves," Jariwala said.
However, the $50-a-year price tag does not come with all the perks of Amazon Prime. For one, Tahoe won't be a multimedia package deal like Prime, and reports claim the service will initially only focus on shipping, according to Gizmodo.
Tahoe is currently strictly by invitation only. Regardless of the limitations of the service, Wal-Mart has made the online shipping game a lot more interesting for customers.
