Walmart+ sales event to build revenues and subscriber numbers
Walmart isn’t waiting on Amazon.com. The retailer has launched a special sales event that is exclusive to Walmart+ subscribers. Take that, Prime Day.
Members of Walmart+ yesterday at noon ET received online access to deals of up to 40 percent off hundreds of items, including gaming consoles, computers, tool sets and vacuum cleaner. Walmart will offer new “Black Friday-like prices” over the next two weeks on selected products while supplies last.
The retailer is running the event following its success providing Walmart+ customers early access to Black Friday deals as part of its “Deals for Days” sales promotion in the lead up to Christmas.
Walmart is offering the deal as an incentive for current members of Walmart+ to continue renewing their subscriptions that provide free grocery delivery and shipping on online orders, plus gas and prescription drug discounts.
The retailer is also looking to add new subscribers with a free 30-day trial offer. Estimates have put the number of Walmart+ members between 11.5 million (Consumer Intelligence Research Partners) and 32 million (Deutsche Bank).
Walmart CEO Doug McMillon declined to provide a subscriber number on the retailer’s recent earnings call. He did speak, however, about the company’s value proposition as a strength in inflationary times.
“During periods of inflation like this, middle-income families, lower-middle-income families, even wealthier families become more price sensitive. And that’s to our advantage,” he said.
Mr. McMillon said that Walmart is prepared to help its customers because its managers do a good job of keeping costs under control and because the company has been dealing with inflationary pressures in Latin America and other places where it operates stores for years. This experience, he said, will help in the U.S.
Walmart reported that its U.S. online sales in the last fiscal year rose 90 percent over a two-year period. The retailer, which generates 60 percent of its business from grocery, is focused on Walmart+ members who spend more than non-members.
The retailer launched the subscription program in 2020 and later added perks such as discounted prescription drugs. Annual subscriptions cost $98 a year compared to Amazon Prime, which recently announced it was raising its yearly fee to $139. Walmart has not indicated if it plans to raise its subscription fees.
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DISCUSSION QUESTIONS: Will Walmart’s current Walmart+ sales event be successful in attracting large numbers of new members to the service? Does Amazon’s recent decision to raise its Prime subscription rate provide an opportunity for Walmart?