A new survey suggested that Walmart+ is seeing some good traction out of the gate in terms of subscriber sign-ups, but while some observers have questioned its findings it’s still an indicator of a level of consumer acceptance of the mega retailer’s answer to Amazon Prime.
Piplsay’s survey found 11% of respondents had already signed up for Walmart+ over the past couple of weeks. It offers unlimited free delivery on orders over $35 for $98 per year, compared to $119 annually for Prime. After some false starts due to COVID-19 and other factors, Walmart+ launched on Sept. 15.
The survey, conducted by Market Cube, ran from Sept. 27-28 and queried 20,179 individuals aged 18 years and older in the U.S. It found that 53% of respondents had heard of Walmart+, while the rest hadn’t. Of those that had heard of it, 27% said they may soon subscribe.
The most popular feature of Walmart+, according to the survey, was free delivery (cited by 35% of respondents), followed by same day/one-hour delivery windows (24%), mobile scan-and-go (14%), fuel discounts (12%), single checkout (10%) and the cost of its annual fee (5%).
Amazon, with well over 100 million U.S. subscribers as of earlier this year, is probably not fearful of Walmart+ gaining significant market share, as its members are generally extremely loyal and enthusiastic, and the side perks are rich.
But maybe they should be a bit concerned with its heavyweight battle bot competitor. Thirty-eight percent of respondents to the Piplsay survey said Walmart+ was a threat to Prime, while 33% said it wasn’t and 29% were unsure. This is in addition to the 19% of respondents who said they switched. Still it’s impossible to know on what basis respondents saw Walmart+ as a threat to Prime.
Other survey findings include:
- 45% of respondents who signed up for Walmart+ said they also belong to Amazon Prime
- 36% of those same respondents said Walmart+ was their first subscription service
- 19% who signed up said they had migrated from Prime to Walmart+
- 60% of men think Walmart+ will be a big threat to Prime, compared to 40% of women
- About 36% of millennial and Gen X respondents combined have both Walmart+ and Prime subscriptions
- 56% of Gen Z respondents said they were excited about the mobile scan-and-go feature of Walmart+, compared to 44% for Gen X
Brittain Ladd, CMO of Pulse Integration and a former Amazon consultant on grocery strategy, said he didn’t see Walmart+ as a threat to Prime because “it offers more value.” He added Amazon with its massive cash hoard could easily acquire a major retailer to further its grocery ambitions, as it did with Whole Foods in 2017, or expand through a partnership, in either case populating stores with its own brands.
“This survey assumes that nothing will change in the future with Amazon, which is false,” Ladd said. “It has many big moves that it can make to minimize the impact of Walmart+.”
Another analyst who did not want to be quoted said if the Piplsay findings were extrapolated out to the entire population, Walmart+ would already have about 15 million U.S. subscribers, based on its weekly traffic, or roughly half of the estimated 30 million Costco members. “It would seem unlikely that Walmart has already signed up half of what it has taken Costco decades to accomplish,” he said.
Marc Wulfraat, president of supply chain consultancy MWPVL International, said while the survey findings were interesting, he’s not sure how sustainable Walmart+ will be at scale, given the huge logistical costs.
“My own opinion is that people will sign up for free food deliveries first and foremost,” Wulfraat said. “But at a cost of $15 to $30 per delivery for Walmart, we’ll see how long this will last.”
Free shipping, after all, isn’t free for everyone, but smart people in Bentonville have certainly run the numbers on projected subscription revenue and average order value, etc. against estimated fulfillment and delivery costs. Also, with a subscription program the company is going after a more affluent and ideally higher spending group than its bread-and-butter customer base.