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15 years later, Walmart to launch its answer to Amazon Prime

Walmart is launching a new membership service that it hopes can compete with Amazon Prime.

Called Walmart+, it will cost $98 a year, or $12.95 a month, and give members same-day delivery on 160,000 items, a fuel discount at certain gas stations and a chance to check out at Walmart stores without having to wait at a register.

Walmart has a long way to go to catch up with Amazon Prime. Launched in 2005, Prime has more than 150 million members worldwide who pay $119 a year, or $12.99 a month, for faster shipping and other perks, such as discounts at Amazon’s Whole Foods supermarkets and access to its video streaming site.

Walmart’s online sales are growing rapidly, especially during the pandemic, when more people have turned to the company to order groceries online and pick them up at a store. But the world’s biggest retailer is still a distant second online to Amazon. Walmart is expected to take 6% of all online sales in the U.S. this year, compared to Amazon’s 38%, according to market research firm eMarketer.

Last week, Walmart emerged as a possible suitor for the U.S. business of TikTok, the fast-growing video app with more than 100 million users. Analysts have said the bid with tech company Microsoft could be a way for Walmart to grow its online shopping business and connect with millions of young shoppers.

Janey Whiteside, Walmart’s chief customer officer, said it wasn’t launching Walmart+ to compete with any other shopping membership.

“We’re launching it to meet the needs of our customers,” she said. “And it really was designed to make their busy lives easier.”

Walmart+ members will still have to spend at least $35 online to qualify for free same-day delivery. Items are delivered from stores, which typically costs as much as $9.95 for non-members. The 160,000 items that qualify include groceries, toys, electronics and household items, such as toilet paper and soap.

Members will get a discount of up to 5 cents a gallon at Murphy gas stations or at the 2,000 Walmart locations that have gas pumps. The company said it’s working to add more gas-station chains to its list.

At its stores, members can unlock an app to scan items as they shop and pay without having to stop at a cashier.

The Bentonville, Arkansas-based company said Walmart+ will launch Sept. 15.


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Walmart Canada closes Tire and Lube shops

Walmart Canada announced last week that it plans to close its branded tire and lube shops by the end of June 2020. Walmart’s partnership with Mr. Lube will not be impacted by the company’s decision.
Corporate affairs director Adam Grachnik told media that the move will allow Walmart to put a greater focus on accelerating their growth ambitions via in-store, e-commerce and pickup channels while delivering their core business of food, consumables, health and wellness, fashion and general merchandise.
The decision will impact 550 workers and 106 Walmart Canada locations. The 50 Mr. Lube shops that are teamed with Walmart sites will continue to offer service. Stores will also continue to sell automotive products.
Walmart said it hopes to offer new roles to store associates who are impacted by the closure. Workers will be repositioned and retrained to minimize job loss.

Unknown

Shopify and Walmart team up to take on Amazon

UnknownShopify Inc. is upping the ante in its battle against Amazon.com Inc. by aligning itself Walmart Inc. in its fight with the Seattle online retailer.

The Ottawa-based e-commerce giant, whose software powers online stores for more than one million companies, on Monday announced the partnership, which will allow U.S. merchants to sell their products on Walmart’s website.

By the end of the year, Shopify expects 1,200 of its merchants to be selling products through Walmart’s marketplace, which is visited by more than 120 million Americans every month.

Amazon had more than 2.01 billion visits in February alone and is the most visited e-commerce property in the United States, according to Statista. Walmart holds the number two spot.

The partnership is their latest swing at Amazon, a behemoth that has revolutionized the world of e-commerce with its online marketplace, massive warehouses and speedy delivery services.

Amazon has been eating into Walmart’s low-cost model by enticing customers with equally affordable prices and the added convenience of quick delivery.

Asked whether the Walmart deal was signed with Amazon in mind, Shopify’s vice-president of product didn’t single out any one company. “Anything that reduces the barrier to entrepreneurship is good for merchants, good for consumers, and good for Shopify,” said Satish Kanwar.

His company, however, tweeted a graphic on Monday based on an image used with a recent story in the Guardian newspaper about the Shopify-Amazon rivalry. Shopify animated the graphic to zoom in on a frowning character apparently made of Amazon boxes that was being towered over a shopping bag bearing Shopify’s logo.

Walmart has been trying to keep up with Amazon, which has undercut retailers with its algorithms and in-house brands and hastened the speed of online shopping, sending competitors scrambling to keep up.

“If you have a common enemy then the idea of forming an alliance to try to counteract your common enemy makes a lot of sense,” said David Soberman, a University of Toronto marketing professor.

“Shopify doesn’t benefit from the growth of Amazon. The stronger that Amazon is, the less likely it is that an independent merchant wants to set up an online store with Shopify.”

The Walmart-Shopify partnership could work well, Soberman said, because it matches Walmart – still the world’s biggest retailer – with one of Shopify’s strengths: inventory management.

Lisa Hutcheson, managing partner at consulting firm J.C. Williams Group, said the two are also a good fit for each other because Walmart is keen on digital growth – an area where Shopify has long focused.

Walmart.com’s sales surged 74% in the first quarter of its fiscal year as the brand experienced increases in demand for curbside sales and online orders during the pandemic’s early days, when details of the Shopify partnership were being worked out.

But even together, Walmart and Shopify are unlikely to beat Amazon, Hutcheson said.

“Amazon is always one step ahead of everyone in terms of where they are going to pivot next,” said Hutcheson.

“I think (Shopify) will be able to give it a run, but not catch up.”

Shopify, which temporarily topped RBC as Canada’s most valuable publicly traded company earlier this year and counts among its customers Kylie Cosmetics, Budweiser and Nestle, has been in more direct contention with Amazon since last year, when the company announced plans for a network of fulfilment centres meant to help merchants lower shipping costs and ensure timely deliveries.

The centres will focus first on the U.S., one of Amazon’s strongest markets, with the door open to expansion in other regions.

The Walmart partnership comes a month after Shopify teamed up with Facebook Inc. to allow merchants to create a customized online storefront for Facebook and Instagram.

 


Walmart to quit selling e cigarettes amid vaping backlash

Walmart is getting out of the vaping business.

The nation’s largest retailer said that it will stop selling electronic cigarettes at its namesake stores and Sam’s Clubs in the U.S. when it sells out its current inventory.

The retailer said the move is due to “growing federal, state and local regulatory complexity” regarding vaping products. It also comes after several hundred people have mysteriously fallen ill after vaping, and some have died.

Walmart’s decision is the latest blow to the vaping industry, which has tried to position its products as healthier alternatives to smoking cigarettes, which are responsible for 480,000 deaths a year, according to the Centers for Disease Control and Prevention.

But the industry has come under increased scrutiny after the deaths and illnesses – along with a surge in underage vaping.

President Donald Trump has proposed a federal ban on flavoured e-cigarettes and vaping products. Michigan banned the sale of flavoured e-cigarettes this week. In June, San Francisco became the first major U.S. city to ban the sale of electronic cigarettes.

The bulk of e-cigarettes are sold through vape shops, which number about 115,000 nationwide, with additional outlets including drug stores, grocery stores and tobacco outlets, industry experts say.

E-cigarettes represent a very small part of Walmart’s nicotine business, which also includes traditional cigarettes, smokeless tobacco and nicotine gum, so the impact on the retailer will be small.

But, it will be difficult for vaping companies to replace that access to shoppers given Walmart’s size, said Greg Portell, global lead partner in the consumer and retail practice of A.T. Kearney, a strategy and management consulting firm. Walmart operates more than 5,000 stores under its namesake and Sam’s Club in the U.S.

“Walmart’s size and scale makes their decisions about what products to carry meaningful for the impacted products,” Portell said. “Vaping companies will be especially challenged given the lack of direct consumer access.”

The Vapor Technology Association, a trade group, was quick to slam Walmart’s move against vaping products while keeping cigarettes on its shelves.

“The fact that Walmart is reducing access for adult smokers to regulated vapour products while continuing to sell combustible cigarettes is irresponsible,” Tony Abboud, executive director of the association, said in a statement. “This will drive former adult smokers to purchase more cigarettes.”

More than 500 people have been diagnosed with breathing illnesses after using e-cigarettes and other vaping devices, according to U.S. health officials. An eighth death was reported this week. But health officials still have not identified the cause.

In July, Walmart, which is based in Bentonville, Arkansas, raised the minimum age to purchase tobacco products, including all e-cigarettes, to 21. It also said then that it was in the process of discontinuing the sale of fruit- and dessert-flavoured electronic nicotine delivery systems.

The moves come as Walmart is trying to become a better corporate citizen. It has adopted measures to become more environmentally friendly. It thrust itself in the country’s gun control debate after a mass shooting at one of its stores killed 22 customers in August. Earlier this month it decided to discontinue sales of certain gun ammunition and requested customers no longer openly carry firearms in its stores, even where state laws allow it.

“Increasingly, consumer companies are blurring the line between business and social decisions,” Portell added. “As the risks associated with new categories like vaping become more well known, we would expect retailers to make decisions on what role they want to play in those risks.”

Target says it doesn’t sell electronic cigarettes. CVS Health got out of the cigarette business five years ago, and says it doesn’t sell any vaping devices.


7-Eleven

7-Eleven and Walmart team up in the name of convenience

7-Eleven will offer pickup locations for online Walmart shoppers. Find out more... Read more