The value argument: Both Best Buy and Walmart are pushing their membership programs, TotalTech and Walmart+, by highlighting the significant value that members receive.
- TotalTech launched in October for $199 per year. It offers benefits including product discounts and periodic access to hard-to-get inventory, free delivery and installation, free technical support, and extended warranties on products.
- “Because the membership is so comprehensive, it has broad appeal among our customers,” said CEO Corie Barry, during the retailer’s earnings call last week. “There is truly something for everyone. And the benefit that’s most appealing can vary based on a customer’s unique shopping journey or their stage in life.”
- Walmart rolled out Walmart+ in September 2020 for $98 annually. The program provides free delivery on items purchased from a shopper’s store—including groceries—free shipping for online orders, discounts on prescription drugs and fuel, and access to mobile scan-and-go service.
- Last week, the retailer also launched an exclusive three-week sales event for Walmart+ members. It is reminiscent of Amazon’s Prime Day, which has grown into a major sales event since its 2015 launch.
Holiday bump: The number of consumers who pay for membership programs tends to increase during the holiday season and drop off in the following months, according to research conducted by Bizrate Insights for Insider Intelligence.
- 70.2% of households paid for Amazon Prime in December, a 5.7 percentage point jump from October. That share then fell to 61.6% in February.
- Similarly, 18.3% of households had Walmart+ access in December, a 5.3 percentage point increase from October. The share of those households then fell to 15.1% in February.
- 8.8% of households paid for TotalTech in February, the first time that Bizrate asked about the service. That’s a larger share than Nike Membership (7.1%), Instacart Express (5.9%), and Target’s Shipt service (2.9%).