Another day, another move to capture consumer spend as the holiday shopping season enters into its second half in 2020. This time around it’s an announcement of a new perk for Walmart’s subscription membership offering, Walmart+. Now the company will offer free shipping on orders of any size for those who pay $98 a year for membership. This suspends Walmart’s previous $35 minimum requirement for free delivery.
The move comes about two months after the membership service’s launch and builds off the retailer’s pledge at the time to continue adding benefits to membership. The current list includes unlimited free grocery delivery and fuel discounts. According to Janey Whiteside, Walmart’s chief customer officer, removing the $35 threshold both allowed Walmart to deliver on meeting a frequent consumer request, and the needs of the moment where remote shopping is recommended for public health reasons.
“The pandemic hasn’t gone away,” Whiteside told the Associated Press. “And we felt it was the right time to do it.”
The right time and perhaps the strategic time considering how intense the competition for spend will be getting over the next few weeks, as consumers who are now more than halfway done with their holiday purchases are finishing off their efforts for the year. Free shipping for orders of any size does make Walmart+ slightly more comparable with Amazon’s Prime membership program, which already offers free shipping to members on any order. Walmart+ is often categorized as Walmart’s competitive answer to Prime — but according to PYMNTS’ most recent data on the subject, it might be more accurate at this phase to describe it as more a complement to Prime based on how consumers seem to be viewing it.
Plus has done a very strong job of singing on users out of the gate. Roughly 17 percent of U.S. consumers have signed on to Walmart+ since its September launch, according to PYMNTS estimates. That still trails Prime by a wide share, as 68 percent of the U.S. population has signed on with Prime. Prime has been around for much longer, first launching in February 2005. What is interesting to note is that among that 17 percent Americans who are Walmart+ customers, 15 percent are also Prime subscribers.
And though it remains to be seen if Walmart can hold on to those membership figures when the free trial period expires, it is undeniable that Walmart has made a strong start, though as Karen Webster observes, to really capitalize on that strong start Walmart has to quickly figure out how to start closing the gap with Prime. And, according to PYMNTS’ most recent edition of the Digital Shopping Index, starting their perks expansion with something like wiping out the price of shipping looks to be a pretty savvy move since it is something that consumers put a high value on that merchants show a statistical tendency to overlook. The data indicates that 56.1 percent of consumers regard free shipping for digital orders as an important feature — approximately 1.6 times the share that merchants estimated.
And while big moves get big press, small plays that respond to specific consumer needs may end up being critical as Amazon and Walmart take on a very different year-end shopping rush.
Amazon enters that competition looking fairly well advantaged considering the great digital shift the COVID-19 pandemic sent into overdrive in 2020.
Exiting the holiday shopping weekend, Amazon says it is in the midst of its “biggest holiday season to date.” Something that we may have to take their word for as thus far Amazon has released no official sales figures for either Black Friday or Cyber Monday. In a blog post however, the firm did report figures for the independent merchants on its platform — sellers that saw over $4.8 billion in sales through the two shopping days worldwide, an increase of 60 percent over last year, according to Amazon.
And while sales on Amazon and online in general soared over the holiday weekend, physical foot traffic plummeted, dropping by 52.1 percent this Black Friday compared with 2019.
But while Amazon had a home run of a weekend, close watchers noted that there was at least one interesting metric where Walmart managed to edge out its incredibly digitally-enabled rival. Volumes of future marketing analysis will surely be written about this year’s unprecedented holiday shopping season, but for now we’ll have to make do with industry reports that reveal people’s pandemic-era spending habits in dribs and drabs.
Data from analytics firm Sensor Tower, reported on by Fast Company, noted that with the surge of shopping app downloads over the weekend — 2.8 million first-time installs of shopping apps, the largest ever in a single day — Amazon didn’t quite lead the field. Walmart did, with 131,000 installs on Nov. 27 vs Amazon’s 106,000.
It is, in fact, a small feather in Walmart’s cap and one that can be easily explained away by the fact that it is much harder for Amazon to get first-time app downloads simply because so many people have already downloaded the app. But it is also evidence that Walmart’s focused effort to start gaining digital ground on Amazon is paying off.
A little.
Amazon and Prime remain comfortably ahead on the track to Walmart and Plus. But Walmart is invested in gaining ground. And though this year’s holiday shopping season will be over in a few weeks, the race between Amazon and Walmart will keep right on running into 2021 and beyond.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More