Walmart is planning to launch a paid membership program called Walmart+. Experts say the retail giant should use the loyalty program to leverage its enormous network of stores and offer perks Amazon cannot match.

The to-be-launched Walmart+ service—Walmart Inc.’s planned paid membership program—will not offer the same kinds of benefits provided by Inc.’s Prime loyalty program, experts say. But being different from Prime could be a good thing.

Walmart+ is expected to expand on Walmart’s Delivery Unlimited grocery delivery service, which launched last year, according to Bloomberg News. Delivery Unlimited competes with other same-day delivery services, including Instacart’s Express service, Target Corp.’s Shipt service and Amazon’s Prime Now service. Initially available at 200 stores in Houston, Miami, Salt Lake City and Tampa, Walmart later expanded Delivery Unlimited to include 1,400 additional locations. Delivery Unlimited costs $98 a year or $12.95 monthly and uses a free 15-day trial to entice new members. Customers can also pay a per-delivery fee, with no membership.

Janey Whiteside, Walmart’s chief customer officer, will spearhead the development and rollout of Walmart+. But beyond that, not much has been confirmed. A Walmart spokeswoman this week confirmed the creation of the Walmart+ program but declined to confirm any details.

Amazon’s Prime membership, which launched in 2005, had 112 million members in the United States as of December, according to estimates from Consumer Intelligence Research Partners. With this type of penetration, Walmart+ should distinguish itself from Amazon so that shoppers feel comfortable holding both an Amazon Prime and a Walmart+ membership, says Tim Campbell, director of market insights at data analytics firm Kantar.


“The cards are stacked against Walmart here from a competitive perspective, but it knows it faces an uphill battle if it wants this program to succeed at scale,” Campbell says. “I don’t think Walmart is trying to launch something that can rival Prime’s dominance in the short term. I would think of this as one new initiative among many that could bring incremental revenue and perhaps some loyalty to the company.”

That means offering benefits Amazon doesn’t or can’t match—such as discounts shoppers can use while shopping at one of Walmart’s vast network of more than 5,000 stores and warehouse clubs. That is something Amazon, with only hundreds of stores, cannot yet replicate, given its limited physical store count.

It’s almost certain the benefits of Walmart+ will be different than those offered by Prime, says Paula Rosenblum, co-founder and managing partner at retail marketing firm RSR Research. For example, Walmart likely won’t start producing and providing streaming content, as Amazon does, she says. Walmart already has a streaming video service, Vudu, which is acquired in 2010. However, the service is reported to be for sale.


One “amazing advantage” Walmart has is its ability to offer on-demand grocery delivery anywhere in the United States, Rosenblum says. “Grocery delivery is not going to be an Amazon momentum stopper, but Walmart can play to its core strengths here and gain greater customer loyalty,” Rosenblum says.

“The biggest advantage Walmart has here is its huge base of stores,” Rosenblum adds. “Amazon Prime Now—or Amazon Fresh—[orders] come from distribution centers. The sheer amount of packaging needed to keep perishables from, well, perishing between leaving the distribution center and arriving at the home is a bit of a turnoff [for some consumers]. And of course, there are places where Amazon Fresh is not available.”

The goal for Walmart, Campbell says, should be to create something meaningful to Walmart shoppers,  build it up over time, and not copy Amazon Prime. In terms of revenue and customer loyalty, Walmart+ could become a meaningful success even if it never grows as big as Amazon’s juggernaut, he says. “I would think of this as one new initiative among many that could bring incremental revenue and perhaps some loyalty to the company,” he says.

Prime is a key part of Amazon’s business. Its members account for roughly 65% of Amazon shoppers in the most recent quarter, according to CIRP. Plus, in Amazon’s 2019 earnings report, it reported revenue from subscriptions, which includes Prime’ fees, was $19.21 billion, up 35.6% from $14.17 billion in 2018.


Walmart is No. 3 in the 2019 Digital Commerce 360 Top 1000, while Amazon ranks No. 1.

Why Walmart could use a Prime-like program

Walmart has tried to mimic Prime before. It tested a program called ShippingPass, which offered 2-day delivery for a $49 annual membership fee. Walmart closed that program in 2017, opting instead for a 2-day shipping model that doesn’t have yearly membership fees. But there are good reasons why Walmart wants to try again.

A 2019 survey of 2,000 U.S. consumers from marketplace technology vendor Feedvisor found Prime members are the kinds of loyal, frequent-shopping customers any e-retailer would like to have. According to the survey:

  • Nearly half (48%) of Amazon Prime members make an online purchase at least once a week—compared with 34% of consumers in general.
  • Nearly three-quarters (73%) of Prime members start their search for new products on Amazon, and more than 80% of Prime members go to Amazon when they are ready to buy a specific product.
  • Among surveyed consumers who were Prime members at the time, nearly all (95%) were likely to keep their membership. Of those who are not Prime members, more than a quarter (26%) are likely to join in the future.
  • The consumer survey also found 89% of consumers are more likely to buy products from Amazon than other ecommerce sites. (52%) and eBay (43%) are the leading alternate platforms.

The new program might overlap with Sam’s Club

The success of Walmart+ might have to come partly at the expense of Sam’s Club, Walmart’s membership warehouse unit, Campbell says. That’s especially true if, as reported, Walmart+ would offer savings on gasoline at Walmart gas stations and prescription drugs at Walmart pharmacies.


“Unfortunately, Walmart U.S. has a poor track record of avoiding internal competition with Sam’s Club,” Campbell says. The launch of Walmart+ could be another example of that trend, depending on its mix of benefits, he says.

“As about four in five Sam’s Club shoppers also shop Walmart Supercenters, it would certainly be in Sam’s Club’s best interest if Walmart took care to avoid significant overlap,” Campbell says. “Yet because Sam’s Club is so much smaller than Walmart’s Supercenter business, Sam’s Club’s needs can often fall by the wayside if it conflicts with a larger company initiative.”

RSR’s Rosenblum says the impact of Walmart+ in Sam’s Club is likely not “enough to worry about,” at least for now. But she acknowledged the new membership program could affect the warehouse club over the long run.

“It’s an interesting long-term question,” she says. “If this program succeeds, do we want to see a more direct relationship between Sam’s Club and Walmart? I think it might confuse the market. And from what I’ve read, those discounts are not in the initial implementation.”