Walmart will begin testing a new annual subscription plan as early as next month with features that will eventually go beyond those offered by rival Amazon.com’s Prime program.
A Walmart spokesperson confirmed to RetailWire that the retailer has created a new membership program operating under the name of Walmart+, but declined to offer any further details at this time.
Photo by George Frey/Getty Images
Recode, which originally broke the news, reports that the subscription plan is a rebrand of Walmart’s Delivery Unlimited annual grocery delivery plan. The current plan, priced at a yearly fee of $98 or $12.95 a month, allows members access to an unlimited number of same-day deliveries from around 1,600 stores around the country. Delivery Unlimited was rolled out in September after Walmart successfully tested the service using third-party drivers in the Houston, Miami, Salt Lake City and Tampa markets. The new program may allow members to place orders via text, in a similar fashion to Walmart’s recently discontinued Jetblack personal shopping service.
Members of the RetailWire BrainTrust discussing the development online today saw the potential for Walmart to offer something that, if not better than Prime, is at least different.
If Walmart adds other categories like gasoline and prescriptions, they will one-up Amazon in a big way.
“Sounds to me like Walmart+ has the opportunity to be even better than Amazon Prime in some respects,” wrote Jeff Sward, founding partner at Merchandising Metrics. “Walmart may not have been a ‘fast second,’ but it looks like they are being a ‘smart second.’ They are learning from the acknowledged pioneer and leader and building their own competitive model. They can leverage all the advantages that come from physical stores — text on the run and BOPIS; tie-ins with prescription meds and gasoline — it all sounds like a powerful combination of convenience and value for a busy household on the move.”
Down the road, Walmart may look at adding other perks, such as discounts on prescription medicines and/or fuel at the chain’s gas stations. Also being considered is a service that would allow members to scan items as they shop in stores and then check out without having to wait in line.
Such perks would be, according to Steve Montgomery, president of b2b solutions, a critical step to differentiating from Prime.
“Matching Prime’s offer will not move the needle for Walmart in this two-party race,” wrote Mr. Montgomery. “It needs to offer something more or at least something that is perceived as having additional benefits to break the consumers’ habit of automatically thinking of Prime. Based on what we have seen with loyalty programs in the c-store industry, nothing is more popular than discounts on fuel. That is something Walmart’s infrastructure can offer that Amazon can’t.”
“If Walmart adds other categories like gasoline and prescriptions, they will one-up Amazon in a big way,” wrote Harley Feldman, CMO of Seeonic. “Another perk that Walmart might add is prepared food delivery.”
For many of the commentators, it is the prospect of creatively taking advantage of its physical presence that gives Walmart’s subscription service a chance at success.
“They are leveraging their 4,600+ locations in a unique way that Amazon will find hard to match, with 91 percent of the U.S. population living within 10 miles of a Walmart store,” wrote retail expert Ken Morris. “The potential here is staggering.”
Not everyone, however, was convinced that Walmart has the draw to get customers interested in a Prime-like program.
“I don’t mean any disrespect to Walmart, but Amazon Prime was (and still is) lightning in a bottle,” wrote Peter Fader, professor of marketing at The Wharton School, “Walmart+ might be fine, but it can never match the game-changing nature of Prime.”
“Unless you are currently a loyal Walmart shopper, the only potential compelling benefit is the free same-day delivery — especially on groceries,” wrote David Naumann, vice president of marketing at enVista. “The challenge is that more than 100 million consumers are already hooked on Amazon and persuading them to switch or add a second online membership program is an uphill battle.”
In fact BrainTrust panelists like Gib Bassett, customer success director at Salesforce, saw greater potential in Walmart+ going farther afield than Amazon Prime.
“Walmart might instead invest less in matching Prime move for move, and think about things like subscription transportation services, self-driving cars — you get it — things that are typically really expensive, but that fit with Walmart’s low cost mantra and help more easily connect customers to a physical buying experience and general independence from the home,” wrote Mr. Bassett.
Questions of competitiveness aside, Peter Charness of UST Global saw Walmart+ as on point with the needs of today’s consumer.
“Amazon or not — this is what shoppers want, and Walmart is pursuing shopper convenience as much as they may be pursuing Prime,” wrote Mr. Charness.