business news in context, analysis with attitude

Bloomberg reports that Walmart+ customers, who are paying $98 a year to belong to a program positioned to compete with Amazon Prime, are largely not using a number of the benefits that Walmart built into the program, instead seeing the appeal largely as being free shipping.

According to the story, "About three out of four users don’t take advantage of perks such as less-expensive fuel and Scan & Go technology that allows store shoppers to pay for items on their phone, according to a survey this month of 264 Walmart+ members by industry researcher Field Agent … The most common reason respondents gave for not using the other benefits? They simply weren’t aware of them."

The story goes on:  "Based on their experience so far, 77% of Walmart+ members surveyed plan to renew their membership, Field Agent found. That’s below the 93% first-year renewal rate of Inc.’s Prime service, according to estimates by Consumer Intelligence Research Partners. Almost nine out of 10 Walmart+ members surveyed by Field Agent are also Prime members.

"Walmart has said it will roll out more perks, but so far its biggest move was to eliminate the $35 minimum to get free shipping on non-food orders."

KC's View:

These numbers certainly confirm something that has been obvious for a long time - free shipping matters.

As for the other stuff … well, I'd guess that if gas prices keep rising, the appeal of fuel discounts may become a lot more tangible.  Walmart may have to put some elbow grease into marketing it as a benefit, but it could be worth the effort.

From the beginning, Amazon always has taken the approach that it wants to make Prime so attractive and compelling that it would be virtually irresponsible not to belong.  Walmart+ clearly isn't there yet … but there are ways for it to add additional benefits so that the offering will be more attractive.

Walmart always has had a different ethos than Amazon;  it wants to sell you more stuff, while Amazon wants to be inextricably intertwined in every facet of your life.  (I'm not saying one or the other approach is best … they're just different.)

One thought.  I was curious - to be honest, I just couldn't remember - and so I checked this morning to see if one had to be a Prime member to use Amazon's Subscribe & Save service.  The answer was no … but if Walmart were to develop its own automatic replenishment offering and then link it (at least in the beginning) to being a Walmart+_ member, that might be really interesting.