September 15, 2020

Walmart+ Launch: The Potential & Impact of a Walmart Subscription Service

After a long summer of waiting, Walmart+ is officially launched! We let you know some early teasers in our previous post, but we give a quick recap of that post and dive deeper into all of the launch details here.

Have you started your free 15-day trial yet? We would encourage you to sign up, use the service, and let us know about your experience on our LinkedIn page. You can sign up for a Walmart+ trial by visiting https://www.walmart.com/plus.

How Walmart+ is expected to perform

In many ways, it’s both an exciting and challenging time for Walmart to be entering the quick fulfillment subscription space. Walmart.com is the second largest marketplace in the U.S. after Amazon—it sees $21.9 billion in yearly sales as well as 308 million monthly visitors—and it’s one of the fastest growing ecommerce sites in the country.

Indeed, MarketplacePulse recently reported that Walmart’s Marketplace outperformed both ecommerce giants Amazon and eBay, with traffic increasing 55% back in April compared to February, and the Walmart app being the top download shopping app on the iPhone App Store in May. Plus, partly due to Walmart’s new partnership with Shopify, Marketplace sellers have doubled since July 2019, and more come to the marketplace each month.

Thirty-five percent of Amazon sellers are also selling on Walmart, so Walmart+ is, in many ways, the next sensible step for Walmart to compete.

In addition to that, Walmart merged its Walmart grocery and Walmart.com sites together earlier this year, allowing customers to load their online carts with products from across the store. Walmart’s grocery site has become the leading grocery platform in the country, and with that merger comes a surge in traffic to the entire Walmart Marketplace that could rise much higher with the launch of Walmart+.

That said, the new service has significant ground to make up. Amazon Prime is well established in the ecommerce subscription space with over 112 million US subscribers and over 150 million subscribers worldwide and currently has much more product to offer customers.

Amazon Prime Members Over Time | Pattern via Statista Screenshot from Statista

Walmart is also entering this space at a time when COVID-19 has led to widespread financial challenges for consumers and distribution challenges for sites like Amazon.

Will Walmart+ be right for your brand?

When Amazon was just starting, when the platform first allowed third-party sellers, some brands were reluctant to get onboard. Amazon had already established itself as a bookseller, and higher-priced goods weren’t trusted there.

Now Amazon sells luxury goods across the globe, and sellers who didn’t get on early have had lots of making up to do. I believe Walmart+ could prove to have a similar trajectory. These are basically the early days of Amazon. If you want to control how things end up, I would encourage brands to get on earlier rather than later.

Walmart Marketplace is more exclusionary in the vendors it chooses than Amazon. This is great for brands who want to diversify channels, because they can compete more easily within Walmart Marketplace. Fifty seven percent of Amazon shoppers say they also shop on Walmart Marketplace, so there’s also a dynamic demographic of shoppers brands can reach in this space. With the addition of competitive pricing and services offered through Walmart+, it could be a homerun.

Another thing that’s interesting about the Walmart Marketplace is that it allows luxury brands that wouldn’t otherwise sell their product in-store to sell it on Walmart’s online platform. The company is shifting into a provider of not only low-priced items but high-quality products.

I think Walmart is just going to totally transform their position in the industry, and not by taking the leader’s spot, but being in a place where they have a foundation to launch off of.

Walmart Marketplace is still a developing marketplace, and it doesn’t have the same level of support Amazon does. The addition of a developing subscription service could add more challenges at first, but it’ll be an exciting platform to watch over the next few months.

Walmart+ consumer benefits

Walmart's press release on Walmart+ touts these benefits to consumers:

  • “Unlimited free delivery: In-store prices as fast as same-day on more than 160,000 items from tech and toys to household essentials and groceries. This service was previously known as Delivery Unlimited—a subscription service that allows customers to place an unlimited number of deliveries for a low, flat yearly or monthly fee. Current subscribers will automatically become Walmart+ members.
  • Scan & Go: Unlock Scan & Go in the Walmart app—a fast way to shop in-store. Using the Walmart app, customers can scan their items as they shop and pay using Walmart Pay for a quick, easy, touch-free payment experience.
  • Fuel discounts: Fill up and save up to 5 cents a gallon at nearly 2,000 Walmart, Murphy USA and Murphy Express fuel stations. Sam’s Club fuel stations will soon be added to this lineup.”

Walmart Plus Benefits for Consumers | Pattern

Screenshot from https://www.walmart.com/plus

While I love the fact that Walmart+ is allowing cancellations up to 48 hours after the free trial ends, some of the other benefits will seem a little more cumbersome:

  • To receive a 5 cent gas discount at a Murphy station you will need to enter a discount ID code.

Walmart Plus Gas Benefits for Consumers | Pattern

Screenshot from https://www.walmart.com/plus/fuel-discounts

  • To receive a 5 cent gas discount at a Walmart station, you will need to scan the QR code with your phone camera.

Walmart Plus Benefits for Consumers, QR Code Scanner | Pattern

Screenshot from https://www.walmart.com/plus/fuel-discounts

  • There is a minimum order requirement of $35

  • Mobile Scan & Go will still require scanning of a QR code at self checkout.

Walmart Plus Scan and Go for Consumers | Pattern

Screenshot from https://www.walmart.com/plus/

I expect Walmart to roll out new features for Walmart+ and would not be surprised to see some holiday exclusive deals or discounts to drive new users and add excitement. But for now, Amazon Prime benefits seem to be the better value. Please let us know what you think of Walmart+ and reach out with any ecommerce related questions. If you're interested in selling on the Walmart marketplace, reach out to us and request a demo today.