The battle of the titans rages on. Walmart reportedly plans to launch a loyalty program later this month, no doubt in an effort to compete with mega-rival Amazon.
America’s biggest big-box store is set to debut its Walmart+ membership program sometime in July, Recode reported on Tuesday. The service will cost $98 a year, and will include same-day delivery on a multitude of goods and groceries, along with discounts at Walmart gas stations and early access to promotions.
Walmart originally planed to launch the program sometime in March or April, before the coronavirus took hold across the nation and the world.
Details about this month’s launch and the initial scope of the program are scant, and it is unknown whether Walmart+ will debut across the country or in specific markets.
The new program appears to be an augmented rebrand of Walmart’s $98 same-day grocery delivery service, which debuted last fall. While the membership program failed to make an Amazon Prime-worthy splash, the expanded range of promotions, services and eligible items this time around may give the retailer the boost it’s been chasing.
With its massive brick-and-mortar footprint and seemingly limitless assortment of groceries, home goods, gadgets, clothing and more, Walmart has solidified its identity as a one-stop shop—especially in the age of COVID-19. Services like curbside pickup and two-hour delivery have augmented the retailer’s capacity for reaching shoppers who are wary of stepping foot into physical retail.
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Some believe the loyalty play could help Walmart level the playing field with Amazon.
“Walmart’s rollout of Walmart+ is yet another example of companies playing catch up to Amazon,” said Marcel Hollerbach, chief marketing officer at Productsup, a product data optimization firm.
“Membership programs create a great lock-in effect as consumers tend to shop more consistently where they have pre-existing accounts or subscriptions,” he added. Shoppers who pay for Amazon Prime accounts each year are more likely to begin their product searches on the platform, he said, adding that a similar play could allow Walmart to expand its own customer loyalty base.
Hollerbach said he also expects to see new a rollout of digital services from the megaretailer over the course of the coming months. “A subscription program provides the company with access to the resources and outlets needed to build additional offerings around their retail business, such as online gaming or video subscriptions,” he added.
For the program to be successful, however, Walmart+ will need to find ways to differentiate itself from Amazon Prime via services that are difficult for the online giant to replicate, Hollerbach said. Discounts on gas are a prime example (no pun intended) of how Walmart can use its existing network of physical stores to find a competitive edge.
With increasingly sophisticated logistics and a wider breadth of consumer services, big-box stores like Walmart and Target have proven in recent months that they can compete with Amazon’s seemingly unrivaled selection and capacity for convenience.
Walmart’s online sales had grown by 74 percent in the first quarter, while Target’s ballooned by 141 percent. During the same period, data from Rakuten Intelligence showed that Amazon Prime’s share of U.S. online spend—which hovered around 42 percent at the start of 2020—had dropped to 34 percent by mid-April as many consumers bought from whichever company was in stock.
A February report from eMarketer ranked Walmart a distant second to Amazon in U.S. e-commerce sales, with 5 percent of consumers’ online wallet share.