Walmart’s membership service undercuts Amazon Prime on price and offers myriad perks, including access to streamlined checkout and deliveries — two areas where Walmart has struggled in the past.
Called Walmart+, it features no-fee unlimited same-day delivery, fuel discounts, and access to a cashierless option called Scan & Go, which allows shoppers to check out without queues. Shoppers instead use a mobile app to scan the QR codes of items on shelves and show a receipt to store staff on the way out. Walmart temporarily dropped
Walmart, which did not return a request for comment by deadline, has not supported NFC contactless payment apps such as Apple Pay. But earlier in 2020 it updated its own app,
Walmart+, which was announced Tuesday after a period of development, additionally incentivizes delivery by leaning on existing Walmart services. Of the 4,700 stores that will go live on September 15, 2,700 offer delivery. Walmart’s delivery system has also faced challenges, mostly tied to the departure of some of Walmart’s gig economy partners.
There are two conflicting objectives for the incentive subscription model that's behind Walmart+, according to Thad Peterson, a senior analyst at Aite Group. One is to reduce transaction friction and increase sales, and the other is to create a value proposition for the premium offering that retains high-value customers.
“Restricting a low-friction transaction technology to the best customers reduces the opportunity to increase sales across the customer base,” Peterson said “It might make more sense to identify other ways to enhance the high-value customer value prop in a checkout-free environment by delivering highly targeted, personalized incentives while the customer is shopping.”
Fast delivery has become a major element of Walmart’s rivalry with Amazon, with
Consumers pay $98 per year for Walmart+, or $12.95 per month, and more than 160,000 products are covered for same-day no-fee delivery. There’s also fuel discounts of 5 cents per gallon at 2,000 Walmart and affiliated Murphy locations in the U.S.
The fuel discount leans on mobile technology, with Walmart+ subscribers scanning a QR code before fueling (a PIN option is also available).
Walmart+ is not a direct equivalent of Amazon Prime, which costs $119 per year. Prime has more than 10 million products available for one-day delivery and 3 million for same-day delivery — but Prime also includes media content.
All grocers face pressure to offer delivery and online ordering, especially considering lockdowns and changing consumer habits as a result of the pandemic, said Rachel Huber, a senior analyst of payments at Javelin Strategy & Research, adding the technology is still early-stage. As of May, only 8% of consumers said they had used the technology in the last 12 months, according to Javelin.
But there are pressures for supermarket chains to add scan and go, or push it as an option among a menu of delivery and mobile ordering/payment combinations that avoid traditional point of sale checkout. The pandemic has created a general fear of crowding that could push more people to options that avoid crowds and lines. And the competitors are expanding. DoorDash launched
“Walmart has the opportunity to put the impetus on other competitors to offer truly cashierless technology (not just self-scan) if they have a friendly and easy to understand user experience when it’s fully rolled out,” Huber said, adding buying online and having groceries loaded into the car by staff is a more distinctive differentiator at this point. “Still, scan and go is still in its infancy.”
