Battle for member loyalty kicks off ahead of the holiday season! Walmart Inc. (WMT.US) launches a $120 package to take on Amazon.com, Inc. Prime and Costco head-on.

Walmart Inc. (WMT.US) this week launched a joint membership package combining Walmart+ and Sam's Club Plus, directly targeting Amazon.com, Inc. (AMZN.US) Prime and Costco (COST.US). According to the company, the combined membership costs $120 per year, saving $100 compared with purchasing the two separately for a year. That price is $19 cheaper than Amazon.com, Inc. Prime's $139 annual fee and also below Costco's $130 Executive membership, but $55 more expensive than Costco's $65 Gold Star basic membership. For consumers who currently subscribe to both Prime and Costco Executive membership, switching to this bundled package could save up to $149 per yearthe largest discount available. "This is a punch straight at Prime," Bret Rose, CEO of the National Consumer Suppliers Association, said in an interview. He noted that a $120 annual fee provides warehouse membership benefits, delivery services, streaming content and fuel discounts all at once. Rose said that on value for money alone, Walmart Inc. already wins easily on paper. "The timing itself says it all. With the holiday season approaching, consumers' budgets are tight; a membership system can lock in user loyalty and secure recurring revenue before everyone finalizes their spending plans," Rose said. "Membership programs are the hook for retaining users, but low prices are the foundation." On Wall Street, Oppenheimer analyst Rupesh Parikh and his team believe the biggest winner from this new offering is the consumer: the membership benefits bundle is richer, Walmart Inc. and Sam's goods can be delivered directly to the home at no extra charge, and the additional cost to upgrade is very low. Parikh commented: "This new product further strengthens the value advantage of Walmart Inc.'s membership system relative to Amazon.com, Inc. Prime and Costco. If this membership program gains traction smoothly, Walmart Inc. is expected to capture more share of users' wallets, especially in the delivery business; but in the short term, the income statement will likely come under pressure." Looking ahead, Walmart Inc.'s launch of this package on the eve of the holiday season may force Amazon.com, Inc. and Costco to step up promotions, further increasing competitive pressure.