After much speculation and reported delay, global retailer Walmart is poised to launch a highly anticipated newest online shopper membership and loyalty program.
In a report first disclosed by Reuters, but previously speculated by many publications, will indeed be termed Walmart+ membership program is reportedly to be launched on September 15th. According to the Reuters report, the program is designed to leverage this retailer’s strengths in its grocery business and in aiming to provide more convenience in online shopping. However, reports indicate the program will require minimum order requirements to avoid a shipping or services charge. This program was initially speculated to be launched in March, but that timetable was obviously changed.
Reuters indicates: “Walmart+ members will get unlimited free delivery, discounts of as much as 5 cents a gallon for fuel and access to a Scan & Go app that allows shoppers to skip the checkout line. But they will still have to meet a $35 minimum for each online order to avoid shipping fees, or to qualify for grocery delivery to their door. It will cost $98 a year, or $12.95 a month”
Orders related to curbside pick-up or online packages will reportedly have a similar experience as today relative to fees and delivery, nor will Walmart+ members receive preferential slotting. Prior speculation of the program had not included the $35 fee.
The Scan and Go convenience technology has an interesting genesis in that the technology was developed in China to reside alongside the WeChat app among Chinese shoppers.
As a contrast, for $119 per year, Amazon Prime customers receive free two-day or one-day shipping, an array of music or video services, and with the Amazon Fresh grocery and food buying program, a $35 minimum purchase avoids shipping or service fees in eligible areas. An added feature for guiding shoppers through a store turned out to be very popular.
Walmart’s Chief Customer Officer Janey Whiteside indicated to reporters earlier this week that the retailer’s goal is to indeed deepen loyalty among those online customers that already shop among its U.S. stores and websites. She downplayed that this program is designed to compete with any other existing membership program bit rather to help customers in the time and convenience of online shopping. Judging from the financial results of the most recent quarter, it would further appear that with Walmart experiencing more visits from consumers that shopped at other online retailers, and that holding on to those customers is an important objective.
Our readers might be aware that this is not Walmart’s first attempt of launching an online membership and loyalty program. Previous efforts such as Delivery Unlimited or Shipping Pass had mixed successes. Whiteside indicated that the retailer has benefited from these prior efforts and the collective learning has been applied to this new program, including the ability to scale.
Commenting on the above, Gregory Ng, CEO at web optimization consultancy Books Bell indicated to Supply Chain Matters: “The key to making this product launch work relies on consumer psychology not just cost-benefit analysis for Walmart. The reason for the past failed launches may have been the naming or the lack of clarity of the benefit.” Ng further indicated:
“Current consumer behavior (largely due to COVID) has changed the game and Walmart may be poised to succeed this time in generating another revenue stream of membership if they focus on one thing: How can the gains outweigh the pains when it comes to delivering value to the customer? Many customers are already paying for rival services that include unlimited Free delivery. How can Walmart demonstrate more value? How can they eliminate the risk to try the service? How can they personalize the specific value propositions to the right people at the right time in the right places? Walmart’s experimentation culture multiplied by their wealth of consumer behavior data can get them there.”
Indeed, Walmart’s new shopper loyalty initiative will be an important test from a couple of perspectives. Site Recode has previously reported that more than half of Walmart’s top online spenders have Amazon Prime memberships. Of late, a primary goal for the retailer has been to increase upscale buyers and COVID-19 may have helped in that effort as online shoppers trolled often trolled multiple online sites to located needed goods.
Beyond sales and marketing, additional tests are with in-store, customer distribution and supply chain management teams. Thus far in this pandemic, Walmart has been able to successfully maintain online shopping slots for grocers, while other online retailers, including Amazon Whole Foods, stumbled. In the grocery category, while Walmart is recognized as the largest grocery retailer in the US., brand and item selection can be limited because the retailer maximizes supplier procurement by volume vs. selection.
Walmart’s online shoppers know that general merchandise searches can be tedious in that many third-party offerings are presented with Walmart stocked items, and that adds to time and frustration.
In today’s COVID-19 shopping environment, and whatever the future environment turns out to be, brand selection, variety and convenience are now fully expected by online shoppers. Customer loyalty and stickiness are the keys to sustained growth which Amazon all too well. For Walmart, will the third attempt be the charm.
Once again, time and online consumer response will be the judge of Walmart’s next online customer loyalty program.
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