After months of anticipation, Walmart has finally launched its membership program. Known as Walmart+ and also referred to as W+ by the retailer, the service promises unlimited free deliveries along with other perks in exchange for $12.95 a month or $98 a year.
It seems inevitable that Walmart+ will invite comparisons to Amazon Prime, the Amazon.com membership program which also offers free shipping. However, as of right now, it doesn't appear that Amazon is in danger of losing customers to this newcomer.
"While Walmart+ has been assessed as a direct attack against Amazon, Walmart is trying to pave its own path while coexisting with its biggest competitor," says Tom Caporaso, CEO of Clarus Commerce, which specializes in developing premium loyalty programs.
Walmart+ is missing some of the bells and whistles found on Amazon Prime, such as streaming video and music, but the service will likely win fans with regular customers of the superstore.
Benefits of Walmart+
While Walmart has hinted that other benefits are to come, Walmart+ launches with three main perks:
-- Free unlimited delivery on orders with a minimum $35 purchase.
-- Save 5 cents per gallon on fuel purchases at Walmart and Murphy gas stations.
-- Contact-free shopping in-store with mobile scan and go app.
"Walmart's primary focus through the introduction of Walmart+ is to deliver more product choices, value and convenience to existing customers," says Meyar Sheik, president and chief commerce officer for Kibo Commerce, a provider of cloud commerce solutions.
The retailer is offering a 15-day free trial and two pricing plans for Walmart+. Customers can pay either $12.95 per month or $98 per year. Those who had subscribed to Walmart's now-discontinued Delivery Unlimited service will be automatically transferred to a Walmart+ membership.
Walmart+ vs. Amazon Prime
Although comparable in price, Walmart+ provides only a fraction of the products and services offered by Amazon Prime. For a monthly fee of $12.99 or an annual charge of $119, Amazon Prime customers receive a laundry list of benefits, including the following:
-- Free same-day and two-day shipping on eligible products.
-- Unlimited streaming on Prime Video and Prime Music.
-- Free grocery deliveries from Amazon Fresh in certain areas.
-- Unlimited photo storage.
-- Opportunity to borrow e-books and e-magazines.
-- Option to share membership with another adult in household.
"Walmart is missing selection of the product and experience varieties," says Ray Wimer, professor of retail practice in the Syracuse University Whitman School of Management. "Walmart's subscription only offers 160,000 items plucked directly from stores at launch while Amazon stocks 10-plus million Prime-eligible items."
Given that, some industry observers say it's unlikely Walmart+ will siphon customers away from Amazon Prime. "Instead, Walmart plans to hold onto its most loyal customers (by) providing more options that could fill Amazon gaps, such as faster grocery delivery and potential for brick-and-mortar perks like gas discounts or pharmacy rewards," Caporaso says.
The program's fuel discount is an added bonus, but the mobile scan and go app isn't unique to Walmart. Grocers such as Meijer and Kroger already have similar apps and don't require paid membership in a loyalty program to use them either.
Should You Get Walmart+ or Amazon Prime?
For most customers, Walmart+ and Amazon Prime meet different shopping needs. While Walmart offers general merchandise, more than half of its revenues come from groceries. Meanwhile, Amazon offers a variety of merchandise and digital products and services but only has grocery delivery through Amazon Fresh to select areas.
Where Amazon Fresh is available, both companies offer free delivery on purchases of a minimum amount. For Walmart+, the minimum purchase price is $35 while Amazon Fresh requires a $35 or $50 purchase, depending on a shopper's location. Customers can choose from a two-hour delivery or one-hour pick-up window for Amazon Fresh orders while Walmart+ offers one-hour delivery windows.
Because of the limited availability of Amazon Fresh, Walmart+ might have an advantage for grocery shoppers. "Unlimited free grocery delivery, particularly in the face of the ongoing pandemic, is a big perk," Sheik says.
However, for those who use Amazon Prime for streaming movies, ordering last-minute gifts and getting access to special deals, Walmart+ might hold little appeal as a substitute. Instead, the new Walmart service may be something they decide to order in addition to their Prime membership.
According to a 2020 report from Clarus Commerce, 69% of people who are already enrolled in one premium loyalty program expect to join a second one this year. That means people may not feel as if they have to choose between Walmart+ and Amazon Prime. Instead of selecting one or the other, they may choose option three: both.