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Walmart+ Challenging Amazon Prime with $98-a-Year Free Shipping Service

(Image credit: Walmart)

Walmart on Tuesday announced a new service offering, Walmart+, that designed to compete—even undercut—Amazon’s popular Prime service.

For $98 a year, Walmart+ will offer members free shipping on orders of $35 or more, covering more than 160,000 items. There’s a self-service checkout option using a smart phone app that will benefit members when they do venture out to Walmart stores. And Walmart+, which undercuts the $119-a-year Amazon Prime on price, delivers a 5-cents-per-gallon break on gas at Walmart stations. 

One of the big questions about the new service offering: Will Walmart+ include a video component, a la Amazon Prime Video, to draw users to the platform?

Presently, Walmart has partnered with Microsoft on a joint bid to acquire Chinese short-form video platform TikTok. Walmart and Microsoft are bidding against Oracle. Analysts peg the sales price to ultimately come in between $20 billion - $30 billion. 

Notably, Walmart sold its transactional video platform, Vudu, to Comcast’s Fandango division back in April. Vudu would have seemed like a logical starting point to build a multi-faceted video platform, a la Amazon Prime Video, that encompasses everything from SVOD to AVOD to transactional channels.  Walmart also has strong ties to content channels dating back to its leading position as a DVD retailer in the aughts. 

Speaking during a press call Monday, Janey Whiteside, Walmart's chief customer officer,.called Walmart+ “the ultimate life hack.”

For now, at least, analysts seem underwhelmed by the program

"My 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," Neil Saunders, an analyst at research firm GlobalData, told CNET. "When you look at Amazon Prime, it's just light-years ahead.”

Walmart+, Saunders added, also faces the wind drag of “subscription fatigue caused by more established services like Amazon Prime, Netflix and Spotify, which already have inroads to consumer credit cards. 

“For a $35 minimum and $98 annual fee, this is a thin gruel,” said Craig Johnson, president of Customer Growth Partners, a retail research and consulting firm, to the New York Times