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Walmart+ vs. Amazon Prime: How the Loyalty Programs Stack Up
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Walmart has taken several steps over the last year to ramp up its offerings in order to better compete with Amazon, including its recent launch of Walmart+. The retailer is looking to build its e-commerce business by offering an Amazon Prime competing service, encouraging more consumers to shop on its platform.
Amazon Prime is highly successful and currently has over 150 million customers worldwide. Currently, over half of consumers (54%) are Amazon Prime members while 12% of consumers are subscribed to Walmart+, per Feedvisor data. Walmart has seen a remarkable adoption of its subscription service during a short period of time. Even though it is likely that Amazon Prime will continue to reign supreme, Walmart+ can still gain a significant market share.
Below you will learn how Walmart+ and Amazon Prime stack up against one another.
Walmart+ is priced at $12.95 per month or $98 per year, which is a yearly savings of $57.40. Amazon Prime is priced at $12.99 per month or $119 per year, offering a savings of $36.88. Walmart membership program is more affordable, however, it is important to note that Amazon provides its members more perks.
Amazon also offers students and consumers who receive government assistance discounts. Students can sign up for prime at the rate of $6.49 per month, while individuals who receive government assistance are charged a lower monthly rate of $5.99. Walmart does not offer discounts to its membership program at this time.
Both retailers provide a free trial of their subscription delivery service to consumers. Walmart offers a 15-day trial and Amazon provides a 30-day trial. Amazon also gives students an extended trial period of six months.
When Walmart+ rolled out, it required a $35 minimum on online orders to qualify for free shipping. On Dec. 4, 2020, the company dropped its minimum shipping threshold and began to offer free next-day, and two-day shipping on over 160,000 products sold online.
It is clear this was a strategic move on Walmart’s behalf to better compete with Amazon’s subscription service. Amazon Prime offers free next-day and two-day shipping on all eligible orders. There is a $35 minimum on same-day delivery for both retailers.
Walmart+ and Amazon Prime also require a $35 minimum on grocery delivery within a two-hour window. Although Prime members have access to Amazon Fresh and Whole Foods Market, Walmart+ has a wider selection of groceries across the retailer’s vast brick-and-mortar footprint, which are typically more affordable. Walmart is considered the largest grocer in the United States.
Even though Walmart’s and Amazon’s loyalty programs are similar in membership prices and shipping, the retailers offer very different membership perks. Amazon Prime offers more benefits to its members, which include Amazon Pharmacy, Key by Amazon In-Garage Delivery, Prime Video, Amazon Music Prime, Prime Gaming, Amazon Photos, Prime Reading, Prime Wardrobe, Prime Day, and many more.
Walmart+ only provides a few membership perks, however, the retailer mentioned it will add more in time. Considering the benefits it offers are significantly different than Amazon Prime, the subscription service may appeal to a distinctive customer base. Walmart+ currently offers its members Scan & Go (a mobile app for in-store shopping) and fuel discounts, in addition to its fast, free shipping.
What Does This Mean for Sellers?
More consumers are being enticed to shop on Walmart.com and Amazon.com due to the increased adoption of e-commerce, as well as the retailers’ ongoing efforts to expand their services and add membership perks.
Walmart’s overall revenue for the 2020 fiscal year was $524 billion, an increase of $9.60 billion from 2019. Amazon has not released its Q4 revenue from 2020 yet, but taking into consideration the forecasted amount for Q4, the retailer may have generated $372.81 in revenue for the 2020 fiscal year, up a remarkable $92.29 billion from 2019.
Brands and sellers are benefiting from Walmart’s and Amazon’s success as their initiatives, in addition to the rise of e-commerce, have drawn in more shoppers to their platforms. Sellers should take advantage of the high volume of online shopping activity by dialing up their product assortment on Amazon and expanding their online presence to Walmart’s marketplace.
A study conducted by Feedvisor revealed that Amazon and Walmart are consumers’ top choices for online shopping; 89% preferred Amazon while 52% favored Walmart. It is essential for brands and sellers to be present where their customers shop in order to drive brand awareness, increase product discoverability, and boost sales.
Walmart+ launched on Sept. 15, 2020. Like many retailers, Walmart has seen a recent increase in its e-commerce sales, which further solidified its decision to compete with Amazon Prime. Although it is very probable that Amazon will continue to dominate the delivery subscription service market, Walmart can succeed in capturing a substantial customer base.
Walmart+ and Amazon Prime are similar in their membership price points and shipping features but differ in the benefits the retailers offer their customers. Amazon Prime provides a long list of customer perks while Walmart+ is starting off with a few benefits and adding more over time.
The retailers’ efforts to grow their business is indirectly helping the success of brands and sellers as it drives more traffic to their online marketplaces. Sellers who have not started selling their products on Walmart.com should consider diversifying their marketplace presence as an additional method to increase exposure, reach a new audience base, and maximize sales.