NEW YORK (TheStreet) -- Wal-Mart (WMT) wants a piece a piece of Amazon's (AMZN) Prime shipping business -- at least that's the popular talking point. But the idea that Amazon should worry is grossly overstated.
What's more important is the progress Wal-Mart is making to shore up it's competitive position of its brick-and-mortar rivals. As for "attacking" Amazon? Good luck with that.
Code-named "Tahoe," Wal-Mart, the world's largest retailer, is undercutting Amazon's Prime shipping rate by 50%, offering unlimited shipping for $50 per year, versus Amazon's $99 per year rate. The company plans to roll out its new subscription shipping service later this summer on a trial basis to a select group of customers. Wal-Mart promises consumers that their items will arrive in three day or less.
Instead, Tahoe -- regardless how successful it becomes -- has everything to do with attacking Target (TGT) and Costco (COST), not Amazon. Why? One reason is because the unlimited shipping will only apply to about a million products sold at Wal-Mart. Amazon has more than 20 million eligible items that qualify for unlimited deliveries and Amazon continues to add more items each day.
"We’ve heard from customers that they want shipping that's predictable and shipping that's affordable," said Ravi Jariwala, a spokesperson for Wal-Mart. "We think there is an opportunity to put a price point that's affordable in front of them."