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Walmart's Launching an Amazon Prime-Type Service

By Rich Duprey – Updated Feb 28, 2020 at 12:00PM

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The retail giant will rebrand its grocery delivery program, and add on some features borrowed from the high-end concierge service it just shut down.

Walmart (WMT -0.18%) distantly trails Amazon (AMZN 1.57%) in terms of e-commerce sales, but next month, it plans to launch a Prime-like service that in some ways goes beyond what the online retailer offers.

The new Walmart+ member loyalty program marks the latest attempt by the world's largest retailer to staunch the cash hemorrhage from its digital business. Although its e-commerce sales have been strong, they have yet to translate into profits.

Walmart deliveryman wheeling boxes from truck

Image source: Walmart.

The same, but different

Recode reports Walmart will be rebranding and upgrading its existing Delivery Unlimited service, which charges customers a $98 annual fee for free grocery delivery. The new program may also feature text ordering.

It sounds like Walmart is borrowing some of the things it learned from its JetBlack concierge service, which it shuttered last month. That white-glove, personal shopping service allowed customers to text or even submit pictures of items they wanted; through a combination of artificial intelligence and personal shoppers, the retailer would search out the merchandise and deliver it free of charge. JetBlack never had more than a few hundred customers and it reportedly lost more than $15,000 a year on each of them.

Walmart+ will be more inclusive than JetBlack, and will offer more than just the grocery delivery service that Delivery Unlimited currently provides. Recode reports that the service may include discounts on prescriptions at Walmart pharmacies, and on gas at its gas stations.

The question is whether a significant number of consumers will be willing to pay for another annual e-commerce subscription, particularly one that's similar to what they already have, but doesn't come with the added bonus of streaming movies and music.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon. The Motley Fool has a disclosure policy.

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