Financial Markets News: Wal-Mart vs. AMAZON

If you thought that no one could touch Amazon when it came to online retail domination, a certain big-box retailer is hoping desperately that you’re wrong. Wal-Mart (WMT) (not the first competitor that springs to mind when you think of Amazon) is rolling out its answer to Amazon (AMZN) Prime this summer – and the offer is pretty appealing. The discount retailer which, like most brick-and-mortar retailers, has been losing ground to Amazon for years now, plans to test a $50-per-year unlimited shipping service in just a few months. The service will provide free three-day shipping on more than 1 million items[1].

While this might sound at first like a pretty big problem for Amazon, many analysts suspect that Wal-Mart could be fighting a losing battle. For starters, the service only covers shipping on about a seventh of Wal-Mart’s online inventory, and the shipping speed is slightly slower than Prime customers are used to. Analysts predict that the service might attract subscribers from Wal-Mart’s existing buyer base, but that it is unlikely to draw Prime users away from Amazon. Given that an Amazon Prime membership also includes a free Kindle library, Prime instant video, music streaming, and Cloud photo storage, we’re inclined to agree. Forbes noted that Wal-Mart might answer this comparison by adding extras like Vudu streaming video in the future.

“There is nothing about this program that would make someone like me switch,” observed managing partner at RSR Research Paula Rosenblum. “Wal-Mart may roll it out, but I don’t see a huge uptick,” she concluded. The new service has definitely gotten some serious media coverage, however, and Wal-Mart stock values appear to be experiencing an uptick as a result. At time of publication, share values were up nearly two dollars over last week.

Would you subscribe to Wal-Mart’s free shipping service? Would you opt out of Amazon Prime to do so?

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About the Author (Author Profile)

Carole Ellis is editor in chief of the Bryan Ellis Investing Letter. Under Carole’s leadership, the Bryan Ellis Investing Letter has grown to over 700,000 subscribers, making it one of the largest real estate newsletters in the world. Each day, Carole directly impacts the daily thinking and conversations of real estate investors worldwide by providing thought-provoking analysis and commentary on news topics relevant to serious real estate investors.

Carole has a strong background in research and in the management of respected publications. She holds a degree in English Literature from the University of Georgia, and has substantial research experience in plant biology. She is the former editor of and writer for the University of Georgia’s Research Magazine. She’s also the author of hundreds of articles and multiple books and home study courses published under the names of her clients, many of whom are well known, highly respected real estate entrepreneurs as well.

Carole makes her home in Kennesaw, Georgia with her husband Bryan and 4 children.

Comments (4)

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  1. wt says:

    I’m not an Amazon member but if I were, I would remain with them. Walmart still has alot more convincing to do when it comes to online consumer business. $50 free shipping and probably on small items that most consumers don’t care to purchase or they can just pick up themselves is not gonna cut it. Now, say they raise the free shipping up to $100 unlimited per year on heavier boxed items like TV’s,home furniture (beds/desks) and garden equimpment (patio sets,above ground pools and lawnmowers) where the cost is a bit more to ship, these types of items might be what they need to work on to help their program succeed. Otherwise, I think their wasting their time and efforts.

  2. G13man says:

    i will not shop walmart period . They dumped american manufactures for Chinese ones.. so walmart is responsible for loss of american jobs as well as low pas as well as 1/10 of american debt to china ..

    • Alex says:

      fully agree 100%, same for me.

    • Texxxxxxxxxx says:

      And they did so for a reason…American made, overpriced, low quality vs price goods…vs….foreign made, low priced, still low quality BUT vs price = acceptable by most….or do you think that the Walmart model isn’t working??

      Many studies state that the avg U.S. Citizen enjoys a BETTER lifestyle than they would otherwise had companies with that model(low priced/high volume) not come along.

      Or do you think that the U.S. car industry would have been better off just staying their course when better made foreign cars came into mass supply?? Paying high-wage non-productive workers to put out a shit product and then claiming that people were “unamerican” for not buying their cars.

      Think that worked out for Detroit??

      AND for you guys out there that think globally (world is getting smaller y’all) it raised China out of the economic doldrums and created an economy that has allowed continuation of world economic growth….or should we as Americans just kept our jobs (remember the high-paying low-productivity ones mentioned above) and just said F the rest of the world??

      The problem with y’all’s thinking is that it’s a double edged sword….if you say screw the world…then you get stuck with shitty products/overpriced products and companies that eventually fall anyway…if you allow the change (happened anyway) but then refuse to play, then YOU pay the price by not living at the standard you could live at.

      And so you don’t think I’m knocking the U.S…..I LOVE the U.S…..we have the potential to be the best country in the world (sadly, we are not at this time) BUT instead our population has an ENTITLEMENT mentality….(rich guy 1% lives better than me…that’s not fair…I should get a program that will make the game more fair…everyone should have to buy my shitty product or they’re UNAMERICAN…I should get into college based on my difference not on my work…etc….etc….etc….

      And until we figure out that no one DESERVES anything….it WILL continue…until we kill the whole thing.

      Sad, but everything goes in cycles….we could break it…but we probably won’t….and mainly because of thoughts like those stated by educated folks like yall…

      BTW…what kind of car do you drive…what kind of CPT do you use…who made your toaster…it’s a world economy now and what’s worse is you guys are blaming Walmart for it being worse…not better.

      Shaking my head.

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