Walmart is launching a $98/year Amazon Prime rival (but it's really a grocery war)

Thursday, July 9, 2020 by Robinhood Snacks | Disclosures
_When the Walmart+ delivery arrives in less than 2 hours_

When the Walmart+ delivery arrives in less than 2 hours

Darth Bezos sweating in his Prime Lair... Recode just reported that Walmart's own Amazon Prime-like subscription will launch this month. "Walmart+" (creative) is coming in hot at $98/year (Prime goes for $119). Here's how the reported perks stack up:

  • Delivery: Unlimited same-day grocery/merch delivery, plus limited Express 2-hour delivery. Prime has free: 2-day shipping, same-day delivery in some ZIPs, and grocery delivery (in eligible regions).
  • Discounts: Fuel discounts at Walmart gas stations, early access to product deals, and an available Walmart+ credit card. Prime has: Whole Foods discounts and some cash-back cards.
  • Entertainment: Walmart's new entertainment platform (CAMP) features videos starring celebs (including LeBron). Walmart could gate it off for free to subscribers. Prime has: Prime Video and Music.

This is about securing the (grocery) bag... Walmart is the US market leader in groceries, which account for over 56% of its sales. Its online grocery biz drove a 41% jump in ecommerce sales last year. But gig and online competitors are creeping into Walmart's sacred shopping cart territory...

  • Instacart: In August 2019, Walmart eclipsed Instacart with close to a 50% share of the egrocery market. But it slipped to 25% this March and Instacart soared to 57% share by April.
  • Amazon: Over half of Walmart’s top-spending families now have Prime memberships. Walmart fears losing grocery customers to Amazon's egrocery.

Subscriptions are loyalty-builders... Attractive perks = subscription = customer "stickiness." Amazon's 15-year head start with Prime is a major reason why it's now worth over 4X Walmart. But Walmart is a grocery whiz — it can use that to suck people in with habit-building perks. Your weekly grocery splurge gets you buying bananas and pizza... and jeans and Madden '20 while you're at it.