Walmart, the world’s largest retailer, is trying to one-up Amazon by introducing a “prime” membership of their own. The initiative has been named “Tahoe” and is currently promoting a yearly membership at a price of $50, half the price of Amazon’s Prime membership (CIO). The new multi-purpose initiative aims to increase Walmart’s yearly revenue, but most importantly, attack their largest online competitor.
In this day in age, consumers want their products fast and at the cheapest price. It is for this reason that memberships like Amazon Prime are so successful, and the reason why Walmart wants to get in on the action. Both programs involve offering customers a yearly rate for free shipping on online orders. Walmart, while offering a cheaper price, cannot deliver their orders as quickly as Amazon can. CIO.com has stated that Walmart plans to offer “unlimited "free" delivery on select items in three days or less” (CIO). Amazon already guarantees two-day shipping with their Prime membership, and according to Bloomberg.com, Amazon has already introduced same day shipping to Prime members in major cities such as Manhattan, Dallas, and Miami (Bloomberg). Walmart is currently the largest retailer in the world. Why mess around with a new online membership such as “Tahoe?”
Walmart has created this initiative just to attack Amazon. They believe that customers will do anything to pay a price cheaper than that of Amazon Prime, even if it means waiting a few days for the delivery of their products. It is very understandable that Walmart is operating under this philosophy because it is the way they have functioned since the dawn of their company. Walmart’s mission statement has always been to offer the public the lowest prices out there, and it is the very reason they have developed multiple successful promotions such as the “price match guarantee.”
While in theory Walmart’s “Tahoe” seems like a great idea, I do not think it is the right time for this initiative. Amazon Prime has been active for ten years and has grown by about 50% in the United States in just 2014 alone (CIO). No matter how hard they try, Walmart will need to spend years of research and development to get to the point where Amazon is today with their Prime membership. The prime reason that this initiative will not work out for Walmart is because of Amazon’s speed. Just as Walmart prides themselves on their low prices, Amazon prides their company on delivery speed. They have developed many programs such as an entire robotics field just to further improve shipping speed. No matter how cheap Walmart can make their “Tahoe” membership, I believe most of the public will stick with Amazon because of their speed and reliability. Walmart should spend more time and money improving technologies to advance shipping speed. I believe if they reach a point in the future when they think they can keep up with Amazon’s speed, then they should introduce “Tahoe” to the public.