Wal-Mart Stores, Inc. (WMT) Takes Aim at Amazon Prime

Wal-Mart Stores, Inc. (NYSE:WMT) is ramping up its efforts against Big Tech, recently unveiling its expanded free, two-day shipping program and in-store mobile payments.

Wal-Mart Stores, Inc. (WMT) Takes Aim at Amazon Prime

On Wednesday, the retailer introduced an expansion to its two-day shipping program, called ShippingPass, that puts it firmly in the path of Amazon.com, Inc. (NASDAQ:AMZN) and its $99 per year Prime service.

And on Thursday, WMT stepped up its Walmart Pay service in New York, and it plans to launch the service in more than 500 stores across 11 states. Take that, Apple Inc. (NASDAQ:AAPL), Samsung Electronics (OCTMKTS:SSNLF) and Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL).

But first, let’s take a look at Walmart’s free two-day shipping program and what it means for AMZN.

WMT: A Thorn in AMZN’s Side

OK, so it’s not entirely free — it’s $49 per year. Still, that’s half the price of Amazon Prime ($99/year). Two-day shipping has been a long-time project for WMT, but until this week, only a select few shoppers were able to sign up. That said, Walmart’s service doesn’t come with the same bells and whistles of Amazon Prime, such as Prime Music and Prime Video.

Walmart has poured about $2 billion into its e-commerce efforts, where it also added hundreds of additional products from small and large companies. ShippingPass does not include products offered from third-party sellers, but WMT plans to include them in future expansions. In total, WMT offers about 10 million products online versus hundreds of millions offered at Amazon.com.

Amazon stands by Prime as “the best deal in the history of shopping,” according to WSJ.com.

Walmart Pay Opens Across New York

Early this morning, Walmart announced the launch of Walmart Pay, its mobile payment service, in 100 stores throughout New York. The impact could be costly for Apple, Google and Samsung, as WMT still does not accept mobile payments from them.

And according to Tonya Garcia of MarketWatch, Walmart is introducing the technology in 13 more states spanning 500 stores including Pennsylvania, Maryland, Delaware and throughout the New England area.

Shoppers can check out with either iOS or Android devices through Walmart’s mobile app, which boasts 20 million-plus monthly users. But it’s the 140 million or more customers that walk through Walmart doors each week that will have the biggest impact, as adoption rates for WMT’s mobile app and payment service pick up.

Bottom Line for WMT

Consumers have come to expect faster shipping speeds, and speedy delivery coupled with Walmart’s low-cost mantra could put a dent in Amazon’s ability to grow Prime users. That said, turning out a quality shipping service on low-margin items could become more costly for Walmart than it’s worth, especially with flagging same-store sales.

As for Walmart Pay, it could actually be less of an issue for Apple, Google and Samsung than it is for Amazon, as WMT simply wants to make it easier to buy things in its stores.

According to a press release from Walmart in December:

“Built with the goal of improving how customers check out and dramatically expanding mobile payment access, Walmart Pay is like no other mobile payments solution available today. With this launch, Walmart becomes the only retailer to offer its own payment solution that works with any iOS or Android device*, at any checkout lane, and with any major credit, debit, pre-paid or Walmart gift card – all through the Walmart mobile app.”

WMT stock is up 0.95% in early afternoon trading.

As of this writing, John Kilhefner did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/06/walmart-stores-inc-wmt-takes-amazon-prime-amzn/.

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