Walmart Inc. can expect a warm response to its new Walmart+ membership program from consumers who shop online frequently.
Overall, 41.1% of the 604 online shoppers surveyed by Digital Commerce 360 said they were very (14.9%) or somewhat (26.2%) likely to join Walmart+. But the interest is higher among avid web shoppers: 47.7% of consumers who shop online at least once a week said they are very (19.2%) or somewhat (28.5%) likely to sign up for Walmart+.
Even among members of the Amazon Prime program of archrival Amazon.com Inc., 42.7% express interest in the membership program Walmart announced last week. Walmart plans to launch the program Tuesday, Sept. 15.
“The big takeaway is that quite a few consumers may be interested in another program like Amazon Prime, and it may be that shopper satisfaction with Prime and its convenience makes them more inclined to try a program like Walmart+,” says long-time ecommerce consultant Lauren Freedman, now senior director of consumer insights for Digital Commerce 360.
She notes that 88% of the survey respondents—who were limited to consumers who shop at least once a month online—belonged to Amazon Prime, an indicator of how popular Prime has become among consumers who shop online on a regular basis.
The coronavirus outbreak also likely contributes to consumer interest in Walmart+, Freedman says. “More shoppers are now buying groceries online, and Walmart is the country’s leading grocery retailer and has reported a big increase in online food sales,” she says. “Plus, many consumers are consolidating their purchasing among fewer retailers, and Walmart seems to be among those gaining ground as a result.”
Walmart did not immediately respond to a request for comment.
The membership program will offer free shipping on online orders of more than 160,000 items shipped from Walmart stores, a discount of up to 5 cents a gallon at 2,000 Walmart stores and Murphy USA and Murphy Express gas stations, and a faster way to pay in-store using the Walmart mobile app. Membership will cost $98 a year or $12.95 per month.
Interest in the program is higher the more often a consumer purchases online, with 56.5% of those who shop websites daily indicating interest in the program, versus 46.6% of those who shop online a few times a week and 42.9% of weekly online shoppers.
Other findings from the survey include:
- Of consumers who currently shop on Amazon.com and not Walmart.com, 29.8% say they are interested in joining Walmart+. But among those who shop on Walmart.com, including those who shop on Amazon, 52.6% say they are at least somewhat likely to sign up for Walmart+.
- There was little difference by gender, as 41.5% of men and 40.8% of women said they were somewhat or very likely to join Walmart+.
- Among those who said they were not interested in the program, the main reason given was that they already belong to Amazon Prime and don’t want to pay for another program (61%). That was followed by 26% who said they were not sure if they would get free shipping as the no-fee offer only applies to items shipped from Walmart stores (26%).
Freedman says that if Walmart+ does succeed, it could put pressure on other retailers, especially supermarket chains and other big grocery retailers like Target Corp., to either introduce similar paid membership programs or at least offer more free shipping of online orders. “Free shipping is increasingly an expectation among online shoppers and always a customer favorite,” she says.
Only 6% of retailers in the Digital Commerce 360 Top 1000 rankings of North America’s leading online retailers offer a paid membership program. However, 24% offer some kind of loyalty program.
Walmart is No. 3 in the 2020 Digital Commerce 360 Top 1000, an annual ranking of North America’s leading retailers by web sales. Amazon is No. 1 and Target No. 12.
Digital Commerce 360 conducted the survey Thursday, Sept. 3, two days after Walmart announced the planned launch of Walmart+, using Survey Monkey, a tool for surveying online consumers.