Let me start with the bottom line, Walmart is launching its “Walmart +” subscription service for $98/year that will deliver the following benefits:
1. Unlimited free “same day” grocery and merchandise delivery
2. Limited free Express 2-hour delivery
3. Discounts on gas at its Walmart gas stations (usually already the cheapest gas in town, always use them when traveling, I think this is worth $0.40/gallon
4. Early access to new products and deals
5. Access to a Walmart + credit card
6. Free access to CAMP, the Walmart entertainment platform — yawn
As I look at the offering, the big thing to me is the same day grocery delivery and the Limited Express 2-hour delivery.
During the pandemic, Walmart has seen its online grocery business explode (+41% growth) and that is driven by delivery. Walmart is the nation’s largest grocer. For comparison, it is about 18X bigger than Whole Foods.
Obviously, Walmart is taking aim at Amazon. Amazon Prime ($119 annually) offers the following benefits:
1. Depending on the specific item — free same-day, one-day, two-day delivery. This is not for every item and it may require a $35 minimum purchase.
2. Grocery delivery (Whole Foods, Amazon Fresh, Amazon Pantry) — free same-day, ultrafast delivery. Again, $35 minimum and ultrafast is not in all cities.
3. Prime Video is a huge thing with thousands of TV shows, Amazon Original movies
4. Prime Video discounted access to HBO, Showtime, Starz channels even without cable
5. Prime Music — free access to 2,000,000 songs
6. Prime Music Unlimited — $7.99/month for just what it says: unlimited music
7. FreeTime Unlimited — $2.99/month for access to thousands of kid-friendly games, video, educational video from Disney, Nickelodeon, and PBS Kids
8. Amazon Photos — store, print, share photos with unlimited storage
9. Whole Foods Market — exclusive savings for Amazon Prime customers, 5% cash back for Amazon Prime Rewards Visa users, plus two-hour delivery
10. Amazon Prime Rewards Visa Signature Card — 5% cash back
11. Amazon Prime Store Card — 5% cash back
12. Amazon Family — 20% discount on diapers and 15% on other baby supplies
13. Prime Reading — access to all Amazon books in a Kindle format wtih free reads on selected books <<< This is a huge benefit and I use this every day.
I have left off a few that are small potatoes, but the bottom line is that Amazon’s Prime Membership is very broad. The big differences are in the video and reading areas. Amazon is just getting started in this.
So, why is this important, Big Red Car?
Ahh, yes, why is it important?
Well, Walmart is the largest grocer in the US and they are laying down for delivery. Once you develop a portfolio of foods that you regularly order, then it is as easy as pie. [One frustration I have had with both Walmart and Whole Foods is things that are out-of-stock. Freakin’ Walmart was O-O-S for buttermilk for my biscuit maker. Huh?]
If you drive 15,000 miles annually at 18 miles/gallon and save $0.40/gallon (my numbers), then you save $333/year on gasoline alone thereby paying for the subscription service of $98/year.
Walmart is targeting Amazon and has undercut them on their subscription service. For me, the delivery benefits, the grocery shopping, the video, and the books makes Amazon a no-brainer.
Walmart’s offering is also attractive solely for the grocery delivery. The gas is a bonus.
Subscription services are the wave of the future and a lot of folks will have both.
But, hey, what the Hell do I really know anyway?” I’m just a Big Red Car.