Walmart to test cheaper challenge to Amazon Prime delivery

Walmart plans to test a new unlimited shipping service this summer for its online shoppers in a move that undercuts Amazon's $99 Prime service.

Walmart will deliver items purchased through its website within three days for an annual subscription fee of $50, the retail giant said, confirming a report by The Information. Walmart said the test will be invitation only and limited geographically, but it could not specify which markets would have access to the program.

"We will have a closed beta we will initiate later this summer," company spokesman Ravi Jariwala said. "This is just one of many tests we have going on," he said, noting the company's grocery-delivery program.

The test highlights Walmart's efforts to grab a larger share of the online sales market from Amazon, one of the Internet's largest retailers. The test appears to challenge Amazon Prime, the two-delivery service launched 10 years ago.

The program has proved lucrative for Amazon. At the end of 2014, Amazon Prime had 40 million US members, up from an estimated 29 million at the end of the third quarter, data from Consumer Intelligence Research Partners shows. CIRP estimates that the average Amazon Prime customer spends $1,500 per year on the e-commerce site, compared with $625 for nonmembers.

Walmart's test will offer more than 1 million of the best-selling items available on Walmart's website, about 14 percent of the 7 million items listed on the site. However, at this point in the offering, Walmart doesn't yet plan to add free movie or music streaming to subscribers, as Amazon Prime does.