Retailer to revamp grocery-delivery service as USD 98-a-year Walmart+ membership.
By Sarah Nassauer from Wall Street Journal
Walmart Inc. WMT is trying again to build a membership program that can rival Amazon Prime, the Amazon.com Inc. service with more than 150 million members.
On September 15, 2020, the retail giant will launch Walmart+, a USD 98-a-year membership that includes free grocery delivery, a discount on gas from Walmart parking lots and the ability to check out via a mobile phone in stores.
Members can get free home delivery for some of the roughly 130,000 items, including fresh food, toilet paper or electronics, sold in the average Walmart store. Delivery from Walmart stores for nonmembers typically costs around USD 9 per order.
The new programme does not include free delivery from Walmart.com, which sells millions of items. Walmart offers free shipping on most web orders above USD 35.
Walmart hopes the new program will appeal to busy shoppers and will add more perks in coming months, said Janey Whiteside, Walmart’s chief customer officer. In tests, Walmart shoppers with a membership spend more and shop more often with the retailer, she said.
The programme is a version of one Walmart has tested since last year called Delivery Unlimited, which also offers free grocery delivery for USD 98 a year. The company declined to say how many customers have signed up for that service.
Walmart had planned to launch Walmart+ in the spring, internally calling it a rebrand of Delivery Unlimited, according to a person familiar with the plan, but delayed the launch because of the new coronavirus.
Some retail analysts see the potential for Walmart to build another stream of profitable revenue through membership with Walmart+, though how popular the program will be is unclear. All current Delivery Unlimited customers will automatically become Walmart+ customers, said Ms. Whiteside.
“We like Walmart’s chances of success with a subscription model,” said Simeon Gutman, retail analyst at Morgan Stanley in a July report. “Walmart has multiple assets it can leverage,” he said, including online grocery pickup. Walmart could lose money on the program at first, he said, but it could help Walmart attract more of each customer’s spending over time.
Amazon Prime includes free, fast delivery of millions of items as well as access to video entertainment, streaming music and other perks for USD 119 a year. Last year, Amazon added AmazonFresh grocery delivery for Prime members, dropping an extra monthly fee. It expanded online grocery pickup from Whole Foods stores amid the coronavirus pandemic.
In 2017 Walmart scrapped a previous attempt at a membership program called ShippingPass that offered free shipping on Walmart.com orders. The retail behemoth moved to offer free delivery of orders over USD 35 on its website, which is still the case today.