Walmart+ Launch Leaves Open Issues

Walmart answered one big question with the announcement of Walmart+ Tuesday morning (Sept. 1) as it put a Sept. 15 start date on the subscription service that will serve as the retailer’s challenge to Amazon Prime. But it left some key issues and details unaddressed.

First, the facts. Walmart is positioning the service as a “life hack,” which speaks to its need to look and sound younger than its 46-year-old key customer segment. It is also leading with its online presence and capability, which addresses its Amazon issue. It also confirms the price point ($98 per year). And finally, it set out its three main benefits: unlimited free delivery of all products where available including grocery, contactless payments via Walmart Pay and fuel discounts.

“We are a company committed to meeting our customers’ needs,” Walmart Chief Customer Officer Janey Whiteside said in the announcement. “Customers know they can trust us and depend on us, and we’ve designed this program as the ultimate life hack for them. Walmart+ will bring together a comprehensive set of benefits where we see the greatest needs from our customers and where our scale can bring solutions at an unprecedented value.”

The Sept. 15 date was the main open issue for Walmart. It now sets the stage for a better competitive footing with Amazon, which is expected to name Oct. 5 as its Prime Day. Prime Day is an occasion for discounts to drive Amazon sales and traffic for its sellers, but it’s also an opportunity to entice consumers who have not yet signed up for Amazon Prime to do so.

“Walmart clearly wants to get the program off the ground sooner [rather] than later in order to make hay in advance of the Christmas shopping season,” said retail consultant Carol Spieckerman, the Arkansas Democrat-Gazette reported. “The pressure is on from a timing standpoint.”

But for every question answered there’s another one left open. For example, the company did not address whether the service would be available in all markets Walmart serves. In rural markets it would seem that same-day delivery is harder than major metros. It also left the role of Instacart open. Will Instacart be integrated into all grocery delivery? Currently the partnership is limited to test markets. There had been speculation that Walmart would integrate Instacart as an exclusive, branded service much like Target does with Shipt.

Walmart also left open the issue of the “loyalty” aspects of the program. There were no discounts or special launch offers announced. If it intends to compete with Amazon, it’s vulnerable in the entertainment area. The Prime subscription comes with access to Prime Video as well as exclusive gaming. It could also be one of the reasons Walmart sees TikTok as a necessary addition to its portfolio.

Despite the holes in the announcement, the news of Walmart+ launch received mixed in the analyst community and the press.

“A subscription model could change the conversation for WMT, allowing it to invest more freely into the business and earning a higher multiple by doing so,” said Morgan Stanley analyst Simeon Gutman, per Yahoo Finance.