Walmart recently announced a new membership offering, Walmart Plus.

For just under $100 (vs Amazon Prime’s $119), your membership will get you two day free shipping, like Amazon Prime, plus same-day grocery delivery, and discounts on fuel from Walmart gas stations. There will likely be other benefits, like preferred access to the best delivery times, special deals, as well as Walmart Express, a two-hour delivery service, which is kind of like Amazon’s Prime Now, and eventually a Scan & Go service and maybe even some kind of video service like Amazon’s Prime video.

It seems like a pretty good offering, and one that would be especially appealing to people who already shop at Walmart, or who used to shop there but switched to Amazon, and now want to go back to Walmart.

The question on everyone’s mind (including mine!) is whether they can catch up to Amazon or whether this offer is too little too late, or an uninteresting copycat offering. Walmart, after all, has introduced other (lackluster) benefits in the past.

For example, who remembers the launch of Mobile Express Returns, launched in late 2017, which promised 30 second returns. At the time, I had been disappointed with that feature. What I liked about it was that it leveraged their footprint. You could order something online, but then return it at Walmart. But to me, once you get in the car, how much does it matter whether you have to spend 30 seconds or 5 minutes inside the store? The friction is getting in the car in the first place, parking, and walking into the store. People really want the return to happen even more seamlessly–like with the item being simultaneously picked up from your home and credited to the account? And since Amazon already does the automatic refund without requiring a return on many items, it seemed to me that these initiatives from Walmart were too little too late.

But this time, it seems like Walmart is doing a better job of embracing what makes them different from Amazon. The chain has 4,000 stores across the United States and claims to have locations within 10 miles of 90% of the U.S. population. They’re able to use their

store base to support their e-commerce operations with programs like online grocery pickup, which has been highly popular. Similarly, its stores support the same-day delivery service. And Amazon doesn’t sell fuel, something that truly drives behavior change, as it’s a regular part of the routine of many shoppers.

Amazon can use Whole Food to some extent, but can’t provide same day delivery on as broad a range of offerings as Walmart can. And the Whole Food curbside pickup options are limited to mostly food, and higher priced organics at that.

Amazon does have a number of advantages over Walmart, including a much wider overall product selection, larger warehouse capacity, and a vast third-party marketplace, though Walmart took an important step in expanding its own marketplace via a new partnership with Shopify.

Amazon has a much higher valuation at $1.5 trillion compared to Walmart’s $337 billion, and has been growing more quickly. By introducing this premium loyalty program, Walmart is providing a solution that almost immediately pays for itself for regular Walmart shoppers, and could change behavior of more infrequent customers.

During the Covid pandemic, consumers have changed their shopping behavior, moving to digital ordering, and either curbside pickup or delivery. Over half of Walmart customers use Amazon Prime too. I wonder how many of them will sign up for Plus, and how many will leave Amazon. Finally, Walmart has a truly compelling offering to compete with Amazon.