Shares of Walmart (WMT -0.64%) climbed 6.8% on Tuesday after news broke that the retail titan is gearing up to take on Prime from Amazon.com (AMZN -1.90%).
Walmart will launch a new subscription service later in July, according to tech site Recode. The service will reportedly include same-day delivery for groceries and other goods, fuel discounts, and other special deals. It will be called Walmart+ and cost $98 per year.
Walmart no doubt hopes that the new Prime-like service will help it close the gap with its e-commerce arch-nemesis, Amazon.
Amazon Prime has more than 150 million members worldwide. Prime members pay $12.99 monthly or $119 annually in exchange for a host of benefits, including free shipping, music and video streaming, and an array of discounts. Prime is widely considered to be a key part of Amazon's e-commerce success. It incentivizes members to shop on Amazon's sites as much as possible, in order to maximize the value of their Prime investment.
Walmart would like to build a Prime alternative that can help to fuel its own e-commerce growth. But whether consumers will pay for both services or drop Prime in favor of Walmart+ remains to be seen.