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Walmart to launch subscription delivery service to compete with Amazon Prime

Walmart sign

The competition for Amazon's Prime two-day delivery service may be heating up as Walmart says it is entering the fray to get merchandise to customers faster for an annual fee.

Walmart will test a $50-per-year online order delivery service later this summer in direct competition with similar subscription-based delivery services such as the $99-a-year Amazon Prime offering.

Under the program, Walmart customers will pay $50 a year for unlimited deliveries of orders they place on, Ravi Jariwala, the company's director of public relations, told eWEEK on May 14.

"We're doing a lot of tests to serve customers in new ways," Jariwala said. "We will have a closed beta this summer by invitation to test an unlimited shipping program that is predictable and affordable."

Customer feedback will direct how the program evolves, he said. Although it will begin by invitation only, the company will review it later to determine if it will be expanded.

"This is one of many tests that we are planning," said Jariwala. "We are testing things all the time and have a lot of different trials going on," including experiments with online grocery shopping with pickup at stores or delivery to customers.

Amazon has been offering its subscription-based two-day Prime delivery service for about a decade, which lets customers order a huge number of products with an unlimited number of deliveries for $99 a year. Originally the service was $79. Not all products are available from Amazon using Prime, but most key products are included.

The competition in the online retail market is fierce, and fast, all-in-one shipping deals can be a big attraction for customers and a way to build brand loyalty. If a customer can order all he or she wants from one vendor and get no-extra-charge fast delivery as well, then the customer is more likely to keep buying from that company.

Other companies have also been experimenting with package delivery deals, including Google with its still-expanding one-day metro delivery services around the United States.

In January 2014, Google began testing its fledgling Google Shopping Express same-day ordering and delivery service in the Los Angeles suburb of Santa Monica, where it was initially open only to Google employees. The pilot test in Santa Monica follows a program that launched in March 2013 in San Francisco's Bay Area that has been expanded several times so far.

In May 2014, Google expanded its Google Shopping Express services to New York City and West Los Angeles. In New York, the service began on the entire island of Manhattan from stores such as Babies 'R Us, Costco, Fairway Market, L'Occitane, Staples, Target and Walgreens.

Google has reported that some of the most popular items delivered under the program are everyday essentials like toothpaste and toilet paper, as well as heavy or bulky items like canned soup and potting soil.

Amazon has been seeking to beef up its Prime program for several years by using small drones to deliver packages to customers within 30 minutes in urban areas. In March, Amazon received permission from the Federal Aviation Administration to conduct experiments with its proposed drone-based package delivery services, according to an earlier eWEEK report. On March 19, the Federal Aviation Administration granted an Experimental Airworthiness Certificate (EAC) to Amazon that will allow the company to conduct more research into the proposed system so that it can be refined and explored as a potentially viable delivery system in the future.

The EAC sets rules for the drone experiments, including provisions that all flight operations must be conducted at 400 feet or below during daylight hours in good weather and that the drones must always remain within visual line-of-sight of the pilot and observer. In addition, the drone experiments under the certificate must be flown by a pilot who has a minimum of a private pilot's certificate and current medical certification, the FAA stated.

Back in December 2013, Amazon said it had begun working on a drone-based delivery system that it hoped to use in the next few years to deliver packages to customers' doorsteps in 30 minutes or less, according to an earlier eWEEK report. At the time, Amazon said those future deliveries could be made using what it called a "Prime Air Octocopter," which had four thin metal legs and eight small, horizontally spinning helicopter blades that made it look like a large robotic stink bug. The drone was about the size of a medium-size dog and grabbed and carried its package off to its destination, according to the company's description at the time. Amazon predicted back then that it would be ready to set its Octocopters in flight by 2015, but it is still waiting for the FAA to create and finalize the rules that could one day enable such delivery methods.

Source : Todd R Weiss -

15 May 2015

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