Somewhere out there, Jeff Bezos must be blushing: Walmart confirmed it is developing an Amazon Prime-like membership program called Walmart+.
A spokesperson declined to provide additional details, but Recode, which first reported the news, said the service could launch as early as March and will supplant Walmart’s Delivery Unlimited service, which offers limitless grocery delivery for $98 a year and expanded to 200 metro areas in September 2019.
Recode also reported that Walmart is considering a Jetblack-like feature to allow Walmart+ members to text their orders and, like Prime, it will eventually add perks like discounts on prescriptions or gas, as well as a scan-and-go option, which it tested at a high-tech version of its Sam’s Club warehouse in Dallas last year.
Walmart hopes to attract Prime members with lower grocery prices.
A paid membership program, however, flies in the face of the retailer’s no-fee messaging, which it has often cited as a distinguishing characteristic.
Forrester analyst Sucharita Kodali noted that Walmart subsidiary Jet.com had—and then quickly dropped—a $50 membership fee for its services. (It also offered lower prices to customers who promised not to return items.)
“Walmart just launched a [rewards-based] credit card with Capital One … so they just need to be careful about crazed, confusing messaging,” Kodali said. “Savings Catcher was one of the best loyalty programs they had; it didn’t make any sense when they got rid of that. I hope they’re not trying to replicate Amazon Prime—that doesn’t make too much sense.”
The news comes on the heels of another Amazon-like move: Walmart is now offering its own fulfillment services for third-party sellers, aptly named Walmart Fulfillment Services (WFS).
Like Fulfilled by Amazon (FBA), Walmart will store, pick, pack and ship items on behalf of its sellers.
“WFS is designed to help sellers generate more profitable sales of their inventory at scale, while growing their business with Walmart Marketplace,” the retailer wrote in a blog post. “[Customers will] enjoy a larger assortment of great brands and products along with fast shipping, easy returns and dedicated customer service.”
Rob Gonzalez, CMO of product experience management platform Salsify, said WFS is all about assortment as both Amazon and Walmart deploy “an endless-aisle strategy online.” The key to this, he said, is third-party sellers, which notably account for more than 50% of Amazon’s sales.
“To date, Walmart hasn’t been able to keep up and lacking their own version of FBA has been a significant limiting factor,” he added. “Third-party sellers will list anywhere they can profitably and conveniently make money. Amazon’s offering of FBA has enabled many third-party sellers to list and profit on Amazon, and if a seller is reliant on FBA they can’t profitably sell on Walmart.”
WFS should level the playing field in terms of assortment, but, Gonzalez noted, “The big question mark is: Will consumer shopping behavior follow?”
The same can be said of Walmart+.