Dive Brief:
- Walmart will publicly begin testing a membership program called Walmart+ as early as next month, according to a report from Recode. A company spokesperson confirmed the creation of Walmart+ to Grocery Dive in an email, but would not provide details of the program.
- Recode said Walmart+ is a rebrand of Walmart’s Delivery Unlimited program, which launched nationally last September and offers unlimited grocery delivery to shoppers for $98 a year or $12.95 per month. Unlimited same-day delivery is currently available from more than 1,600 Walmart stores.
- Sources told Recode that Walmart would eventually like to add additional perks like discounts on fuel and prescription drugs as well as a mobile checkout feature. It could also include a feature that would allow customers to use text messaging to place an order.
Dive Insight:
Based on Recode’s report, Walmart+ is the company’s attempt to both distinguish itself from Amazon Prime and remain competitive with the e-commerce giant’s growing grocery business. While Walmart is the largest food seller in the U.S. and leads the grocery industry in click-and-collect, it’s e-commerce platform still needs some fine-tuning.
So far, the only confirmed component of Walmart+ is grocery delivery. If the retailer wants to compete against Amazon it needs to add additional elements that make paying the annual fee worth it for shoppers.
Costing only $21 more than Walmart's yearly delivery subscription, the suite of benefits for Prime members goes well beyond grocery, to include video, books, music and more, giving members a bigger bang for their buck.
On top of that, it now offers Fresh in more locations and has launched brick-and-mortar grocery The online retailer has found that Prime members spend more than non-members and are highly satisfied, according to a recent study from Retail Feedback Group.
Walmart still has a larger share of the online grocery market at 37% but it has felt the pressure to offer additional services to its platform. The retailer attempted to offer video streaming by acquiring Vudu in 2010, which has been up for sale since at least October, according to reports. Walmart has also acquired retail brands like Jet.com, Bonobos and Moosejaw, though results have proven mixed so far. Jet's grocery service pulled out of New York City late last year.
Walmart also faces competition from the likes of Shipt and Instacart as well as regional services like Peapod and FreshDirect. With multiple players in the market trying to find their niche, Walmart’s delivery service needs to stand out, and a rebooted program could help with that. To date, Walmart has been able to hold its position through offering some of the lowest prices and having the biggest footprint for both brick-and-mortar and online grocery.
