Walmart+ garners favorable reviews, not likely a threat to Amazon Prime

In the first month since Walmart launched its new subscription service dubbed Walmart+, two surveys found consumers are using it but not at the expense of Amazon Prime. To that point, only 38% in one poll said Walmart+ would be a threat to Amazon Prime.

Piplsay polled 20,179 Americans and found 45% subscribed to Walmart+ in addition to having Amazon Prime. From that group, 19% said they had migrated from Amazon Prime. More than one-third of the respondents said Walmart+ was their first shopping subscription.

Walmart+ was offered free for 15 days and expanded an additional 30 days for consumers who answered three questions in a short survey by the retail giant. The service fee is $98 annually or $12.95 monthly, and 50% of users are still in the free trial period, according to a recent survey by Fayetteville-based Field Agent.

Amazon Prime costs subscribers $119 per year or $12.99 per month and the service has more than 112 million subscribers, or 62% of U.S. households. Piplsay reports 11% of U.S. households have subscribed to Walmart+ in the first month, most of which are also Amazon Prime members.

Cost comparison to Amazon was not that important to the new Walmart+ subscribers surveyed by Piplsay as 35% said they were most impressed by unlimited, free delivery on orders over $35. Less important to subscribers were the same day/one-hour delivery window (24%), mobile scan and go self-checkout feature (14%), 5-cent per gallon fuel discounts (12%), and being able to check-out food and general merchandise in one app (10%). Only 5% said the lower pricing compared to Amazon mattered.

Field Agent enlisted insights from its agent base and also found the majority of Walmart+ fans are active subscribers to Amazon Prime (81%), Netflix (75%), Hulu (62%), Disney (56%), and HBO Max (12%). Field Agent users had already taken advantage of the scan and go shopping feature of Walmart+ and 62% had also used the free/delivery option. One-quarter of them had used the fuel discount and 12% said they had used the one-hour delivery window.

“Overall, shoppers were impressed by the service. For every single benefit, no agent said that they were less than ‘completely satisfied’ or ‘very satisfied’ by their experience. Even the least used benefit left an impression: both users of the one-hour delivery said that they were ‘completely satisfied’ with the benefit and that they planned to use the service weekly,” Field Agent noted in the report.

Also, 69% of Field Agent respondents ranked the free, unlimited delivery as the most useful benefit from Walmart+, followed by 56% who favored the scan and go feature to save time while shopping in stores. Fuel savings and the one-hour delivery were ranked well below for their usefulness benefit by more than one-third of the respondents.

FINDING A ‘COMPETITIVE ADVANTAGE’
Analysts have said consumers who believe they are getting their money’s worth are more likely to keep the subscription. Field Agent asked respondents if having the subscription had encouraged more purchases from Walmart, excluding fuel. Half said they are purchasing at least a bit more from Walmart because of the subscription. More than one-third (38%) said they were making the same purchases and 6% said they had purchased less while 6% responded with “not applicable.”

Field Agent found that 95% of respondents are likely to renew the Walmart+ subscription. Analysts agree Walmart+ comes at a time when consumers are already looking for less physical contact and ordering more online. Walmart has said its online grocery business and general merchandise orders helped to grow e-commerce sales by 97% in the second quarter as COVID-19 kept more shoppers at home.

“Everybody wants more convenience in their life, and we talk a lot about how much cognitive load everybody’s got going on. Very few people get excited each week about going to the store to buy groceries and everything else that you need. We started off testing unlimited delivery last year because we saw a tremendous pickup of our pickup business, no pun intended. For those people that do one or two deliveries a month, being able to kind of bulk buy that delivery and subscribe to that was important. We started to look at what was our competitive advantage, and obviously, that is the supercenters in geographic proximity to so much of America,” said Janey Whiteside, chief customer officer at Walmart U.S.

She said Walmart layered in other perks to Walmart+ they believed consumers would want such as fuel discounts and faster and contactless checkouts. She said Walmart will continue to add perks for members over time.

TESTING THE SERVICE
Talk Business & Politics signed up for the Walmart+ subscription and has used the services over the past month. While the scan and go feature did save some time, fresh produce could not be scanned and required a separate transaction at checkout that was not contactless. Walmart said the service for scanning fresh produce is “coming soon.”

The free delivery service was a time saver and Talk Business & Politics found all items on the shopping list were in-stock. The choices for delivery times were adequate and the complete order was delivered 5 minutes early by the driver who was courteous.

The biggest frustration with the service was trying to figure out the fuel discount at Walmart stations. The process was easily understood at Murphy Fuel Stations, but less clear at Walmart. It took more than 15 minutes to figure out the process at two different Walmart stations and the people working there had no idea how to help. Also when purchasing fuel at a Walmart station the member has to use WalmartPay, the mobile payment form. This prevents members from using other forms of payment.

The one-hour delivery option was also not available on any item searched from Walmart Store No. 5261 in Jane, Mo. Walmart said it continues to add more products and stores to its one-hour delivery option. That express service was to be available in about 2,000 stores by the end of summer. The service still does not include all of Northwest Arkansas.

Scott Benedict, director of retail studies at Texas A & M University, said Walmart had to start somewhere and he expects the retail giant will continue to tweak and improve Walmart+. He said the real benefit from the service for Walmart is the massive amount of consumer data it can glean from the wide user base.