(Oct 20): Walmart Inc is bundling its online subscription program with a Sam’s Club membership to lure shoppers from Amazon Prime and other competitors.
Consumers can now get both Walmart+ and Sam’s Club Plus together for US$120 (RM490) a year. Separately, the two memberships cost nearly US$100 more than that amount.
Walmart has been looking at ways to offer new savings as costs have risen in recent years, chief executive officer John Furner said in an interview on Tuesday with Bloomberg News.
Members of the subscription programs have asked for this type of benefit for some time and will now get new perks. The company plans to take their feedback to decide how to update the offerings going forward, Furner said.
“As you hear more about cost of living and costs all over, this is a big saving,” he said, adding that Walmart wanted to start offering the package before the holiday season. “We hear a pretty high number of people who are planning earlier than last year. We also know that there are a lot of last-minute gifts in the market every year.”
Similar to Amazon.com Inc’s Prime, Walmart+ offers free online delivery as well as streaming services, gas savings and other benefits for almost US$100 a year, or US$13 per month.
Sam’s Club, a warehouse club chain owned by Walmart with about 600 US locations, offers two tiers of membership, with the more expensive Plus version costing US$120 annually. Members get free delivery and 2% cash back along with additional perks.
The bundling of Sam’s Club membership with Walmart+ shows how the big-box retailer seeks to capture market share by offering value as sustained inflation sends shoppers on a hunt for deals. It’s a package that competitors will be hard-pressed to match, given no other US retailer owns a big-box operator, a warehouse chain and an integrated e-commerce business.
Shoppers will still have the option to purchase memberships separately. Walmart employees will get both memberships for free as part of their benefits.
Amazon Prime costs US$140 a year, or US$15 per month, while premium subscription plans from Target Corp and Kroger both cost US$100 annually.
Paid memberships have become a more significant driver of growth for retailers. Users tend to spend more and become loyal customers, while fees help boost profits. Amazon, which pioneered the model, remains the biggest player. About 200 million people in the US have access to a Prime membership.
Walmart has said its subscription plan is growing, without disclosing how many members it has. In August, the company said Walmart+ had the best first half of membership growth in its history and reported that membership income grew nearly 17% globally. Sam’s Club has succeeded in attracting younger shoppers with its business model.
Declining consumer sentiment has sparked intense competition among retailers. This trend has largely favoured Walmart, which has built its business on ensuring prices are low. The Bentonville, Arkansas-based retailer has attracted shoppers across income groups in recent years — especially wealthier ones. It has also expanded its selection of goods while offering faster delivery for online orders.
Furner, who took over in February, has said that the company is investing heavily in keeping its low prices as consumers seek out value. This strategy will lead to market-share gains over time, he has said.
Uploaded by Evelyn Chan