The US retail giant Walmart will launch on September 15 its e-commerce membership program. Former CEO Bill Simon said in a news report that this “may lay the path for the company’s online business to turn a profit.”
According to Simon, the e-commerce membership program is a byproduct of the many subscription plans that Walmart played with in the last decade and takes inspiration from each. He expressed in an interview on Closing Bell that “it’s something they’ve coveted for a long time.”
“What Walmart’s trying to do — and it’s been their secret sauce for many years, in particular with the supercenters — is to try to take the traffic, in this case, clicks, that’s generated from their really robust food business and sell general merchandise, in this case, to try to help make their digital online business profitable.”
Bill Simon
With its physical stores and investments in e-commerce operations, Walmart had a boost in its sales amidst the Covid-19 crisis. Cited in a news report is its recent quarterly report showing a 9.3% increase in U.S. same-store sales. It is fueled by a 97% surge in online shopping consumer behavior.
In competition with Amazon Prime, Walmart made a previously called Delivery Unlimited program, which will be renamed Walmart Plus. It includes privileges such as same-day shipping for at least $35, and a Walmart app with cashier-less checkout features. There are also items added found in Walmart stores such as toys, electronics, and household essentials.
Walmart’s new loyalty program costs $98 for an annual subscription or $12.95 for a monthly subscription. On the other hand, Amazon Prime offers almost the same products and services, offers subscriptions for $119 annually, or $12.99 a month. This pricing strategy may attract more customers to avail of Walmart’s program.
“I don’t think — it’s a competitor to Amazon because everything is — but I don’t think it’s a direct competitive move. I think it’s an attempt to leverage their food business.”
Bill Simon
Despite this evident competition, Janey Whiteside explained the reason behind the program.
“We’re not launching Walmart Plus with the intent to compete with anything else. We’re launching it to meet the needs of our customers… We are a company committed to meeting our customers’ needs. We’ve designed this program as the ultimate life hack for them.”
Janey Whiteside, Walmart’s chief customer officer
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