Loyally flushed: Walmart+ is vital for maintaining loyalty.
- As of December 2022, 23% of respondents subscribed to Walmart+, according to an Insider Intelligence and Bizrate Insights survey.
- That’s up from 11% in June 2022, fueled by rising grocery prices and deal-seeking holiday shoppers.
- A shocking 43% of people ages 18 to 34 paid for Walmart+ as of December, way up from the 19% who subscribed as of June.
- For comparison, 60% of survey respondents paid for Prime in December, down from 62% in June.
And it’s not just the low prices. “[Walmart has] really been bundling a lot of services and incentives,” said Canaves, pointing to a Paramount+ partnership and cash-back loyalty program.
Playing for keeps: Growth for Walmart+ carries one major risk—seasonality. Young people who subscribed for December deals could be gone come spring.
- “The key to maintaining a high membership and not have it be seasonal is to appeal to their large in-store audience,” said Droesch, who noted Walmart is trying to do that.
- Walmart+ also costs less than an Amazon Prime membership, allowing Walmart to attract and hold onto consumers who were once loyal to Prime.
- Droesch says it all comes down to value. If Walmart+ consumers see subscription fees coming back to them in the form of discounts and cash back, they’ll stay loyal. “I think that's going to be the best incentive to keep this audience around.”
What’s next? Walmart will also look to creative approaches for attracting—and keeping—customers. Our analysts made a few predictions about what Walmart might be eyeing.
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Walmart could partner with Netflix. The streaming giant is trying to grow its ad business and Walmart wants to grow its media offerings. The resulting alliance would be a win-win, said Droesch.
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Walmart may team up with TikTok. “Walmart is doing a lot to promote livestreaming,” said Canaves. A TikTok collaboration could help both companies push US social commerce.
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Walmart could pick up the pace of at-home return pickup. Walmart already announced this, but Canaves says if it takes off, Walmart would have an advantage over Amazon in terms of convenience.
Final deal: To stay competitive with Amazon, Walmart is striving to be a tech company, said Droesch.
- The retailer is expanding tech and service offerings.
- It’s going after streaming and media deals on the level of what Amazon already has.
- And Walmart is sticking with what it does best: low-price groceries.
Listen to the full episode.
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