Why Walmart Plus thinks it can challenge Amazon Prime
CNET interviews Janey Whiteside, Walmart's chief customer officer, about the origins and future of the new subscription service.
Walmart Plus is the big-box retailer's latest effort at subscriptions.
Just ahead of the holiday shopping season, Walmart is making a new push into a subscription service. The concept, called Walmart Plus, launched two weeks ago and so far includes only a handful of perks. But it might someday shake up the e-commerce subscription market that's thoroughly dominated by Amazon Prime .
Walmart is one of the very few companies that could hope to challenge Amazon , which has a 15-year headstart and boasts over 150 million members worldwide. As the biggest retailer in the world, Walmart has the resources, finances and logistics infrastructure to build out a viable Prime rival.
It's got a very long way to go. Walmart Plus, which costs $98 a year, offers shipping as fast as same-day for orders over $35. It also offers a fuel discount and a "Scan & Go" feature that lets in-store shoppers scan and pay for items using their phones, so they can avoid the checkout line. Amazon Prime, costing $119 annually, offers one-day shipping even for orders under $10, the Prime Now rapid-delivery service, Prime Video and Prime Music streaming services.
Walmart says it's just getting started, though some of its other attempts at subscriptions -- such as the now discontinued ShippingPass and Jetblack programs -- haven't lasted.
An early test for Walmart is coming up very soon, with Amazon's Prime Day sale expected to encourage hordes of customers to shop online to find deals. The event is sure to bring in new Prime customers, but Walmart -- which will be hosting a rival sale -- may be able to bring in some new Plus customers too.
CNET spoke with Janey Whiteside, Walmart's chief customer officer, about her company's plans for the new service and what customers can expect going forward. Here's the interview, edited for length and clarity:
CNET: What's the backstory for creating Walmart Plus?
Whiteside: 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.
And then we started to layer in everything else that we hear from our customers. Fuel discounts are huge, particularly for large parts of America who rely so much on their car. One thing we hear from our customers is, "When I go to the store. I enjoy it but I'd like to be able to get out, as quickly as possible and I really don't want to have to stand in the checkout line." The capacity to let people get in and out and just scan their goods and leave -- even more so now to do it entirely contactless -- was another benefit we knew was incredibly important.
A $98 subscription may seem at odds with Walmart's traditional mission of serving many lower-income shoppers. So who is the target audience for Walmart Plus?
We feel confident that it is positioned at our core and our growing customer base. Staying true to our "everyday low price" commitment to our core customer base was incredibly important. If you're a customer that once or twice a month wants their groceries to be delivered, it makes sense for you to enroll in Walmart Plus.
What makes Walmart Plus, I think, a different membership program is one of the core tenets that we have felt very passionately about when we developed it was we would never take anything away from the core Walmart shopper who may not choose to or can not afford to enroll in Walmart Plus. And so we worked to really make sure that everything that we put in Plus was additive and that never took anything away from somebody or disadvantaged somebody who wasn't able to enroll in the program for any reason.
Are you too late to market with this? Has Amazon Prime blanketed the market, they're already too successful, they're already too big?
I really don't think so. I've said this -- I know people are like, "Oh come on" when I say it -- but the reality is we really didn't develop Plus with anything in mind but how do we create the right opportunity to get more to our Walmart customers.
And here's what we know more than ever: right now, that customers want groceries and things that you would get from a Walmart Supercenter, light bulbs and batteries and toilet paper and sanitizer and everything else. And right now, getting those delivered to your door so you don't have to go out, or stand potentially in the line or mask up, is incredibly important to be able to focus on -- whether it's the homeschooling the kids or the 15 other things that we're all trying to deal with through the pandemic.
Is there anything you can hint to about what people can expect from Walmart Plus in the future?
No great membership program is static, by definition. You can expect the program to evolve and grow. Sometimes that will be in small ways, and sometimes that will mean much bigger, more headline-grabbing ways.
