Still Waiting for Walmart’s Big Announcement? A Smart Walmart Customer Just Explained the Delay

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August 29, 2020

I’ll admit, I’ve been stumped. Stymied, even.

Try as I might, I couldn’t put my finger on the real reason why Walmart hasn’t launched its long-rumored subscription service, Walmart+.

I mean, I’ve been covering business, entrepreneurship and investing for a long time. And if I were to pick just one piece of advice and insight that I’ve heard, it’s this: “All else being equal, in business, a subscription model wins.”

It’s almost always easier and more efficient to get customers to sign up for your product or service once, and pay automatically each month, than it is to try to sell to them over and over.

Amazon figured this out 15 years ago, with Prime, which reportedly has 150 million members mostly paying $119 per year for the privilege. Costco brought in $3.35 billion in membership fees last year.

So why hasn’t Walmart done it? It should be “found money,” right?

Well, it turns out, maybe the smart thing to do was to ask some Walmart customers.

Let me explain. Recently, I wrote an analysis of why Walmart might be delaying the launch of Walmart+, which has been described as its purported Prime-killer.

This came after Walmart CEO C. Douglas McMillon talked about subscription models on a recent earnings call. Among the possibilities I explored:

Some kind of technical or marketing delay.
The theory that increasing its subscription-based online sales could cut into the habits of customers who are already shopping at Walmart in person, thus harming the value of the brick-and-mortar stores that Walmart has spent decades building.
The fact that in going against Amazon, Walmart is facing a competitor with a massive built-in advantage: an incredibly profitable non-retail business, AWS, that can more than make up for any short-term deficit (or even a long-term one) in low-margin or even unprofitable retail sales.

Leave it to an Inc.com reader, Dean Anderson, who came across my article, tracked me down, and laid out a brilliant analysis that I hadn’t thought of:

I would add Walmart+ in a New York minute, for unlimited groceries. I would have them deliver groceries once a week. Doing the math, that means $90/year for W+ equals about $1.75 a week.

I can’t get groceries to my house for less than $10. So, what family wouldn’t take that deal? That’s why they are delaying. It’s groceries.

It would also undermine Instacart, that they just struck a deal with, which isn’t affordable on a weekly basis.

If W+ does not include unlimited grocery delivery I will not subscribe. If it does, I’m immediately signing up.

This is the real delay. I rest my case.

I have to say, this suddenly makes a lot of sense. And I’m happy to give credit for the theory.

I reached out to Walmart for comment, but haven’t heard anything back.

So, I started asking other Walmart customers how they’d feel about signing up for a Walmart subscription service like Prime, and whether grocery delivery would be the real draw for them.

“I would. I wish they could deliver using my EBT card,” said a reader named Rhonda Johnson Lamastus. “I’m disabled and during these crazy scary times it would have been so helpful. I wouldn’t have needed to go.”

There’s another thing I hadn’t thought of: the Supplemental Nutrition Assistance Program (SNAP), which Walmart already accepts for pickup in 45 states, and which reportedly adds up to nearly $60 billion a year in total expenditures.

Anyway, I’m paying close attention to the question of whether and when Walmart+ will launch because I think it’s likely a great opportunity for small business owners who rely on Amazon and Walmart for distribution.

Anything that leads to more competition between these behemoths should benefit smaller businesses, at least in the short-term.

But what if the war for dominance in low margin retail businesses is actually destined to be fought on the lowest margin battlefield of all: groceries?

I admit, I didn’t see the angle–but I’m intrigued that a reader did.

I'll admit, I've been stumped. Stymied, even.

n

Try as I might, I couldn't put my finger on the real reason why Walmart hasn't launched its long-rumored subscription service, Walmart+.

n

I mean, I've been covering business, entrepreneurship and investing for a long time. And if I were to pick just one piece of advice and insight that I've heard, it's this: "All else being equal, in business, a subscription model wins."

n

It's almost always easier and more efficient to get customers to sign up for your product or service once, and pay automatically each month, than it is to try to sell to them over and over.

n

Amazon figured this out 15 years ago, with Prime, which reportedly has 150 million members mostly paying $119 per year for the privilege. Costco brought in $3.35 billion in membership fees last year.

n

So why hasn't Walmart done it? It should be "found money," right?

n

Well, it turns out, maybe the smart thing to do was to ask some Walmart customers.

n

Let me explain. Recently, I wrote an analysis of why Walmart might be delaying the launch of Walmart+, which has been described as its purported Prime-killer.

n

This came after Walmart CEO C. Douglas McMillon talked about subscription models on a recent earnings call. Among the possibilities I explored:

n

Some kind of technical or marketing delay.

t

The theory that increasing its subscription-based online sales could cut into the habits of customers who are already shopping at Walmart in person, thus harming the value of the brick-and-mortar stores that Walmart has spent decades building.

t

The fact that in going against Amazon, Walmart is facing a competitor with a massive built-in advantage: an incredibly profitable non-retail business, AWS, that can more than make up for any short-term deficit (or even a long-term one) in low-margin or even unprofitable retail sales.

n

Leave it to an Inc.com reader, Dean Anderson, who came across my article, tracked me down, and laid out a brilliant analysis that I hadn't thought of:

n

I would add Walmart+ in a New York minute, for unlimited groceries. I would have them deliver groceries once a week. Doing the math, that means $90/year for W+ equals about $1.75 a week.

n

I can't get groceries to my house for less than $10. So, what family wouldn't take that deal? That's why they are delaying. It's groceries.

n

It would also undermine Instacart, that they just struck a deal with, which isn't affordable on a weekly basis.

n

If W+ does not include unlimited grocery delivery I will not subscribe. If it does, I'm immediately signing up.

n

This is the real delay. I rest my case.

n

I have to say, this suddenly makes a lot of sense. And I'm happy to give credit for the theory.

n

I reached out to Walmart for comment, but haven't heard anything back.

n

So, I started asking other Walmart customers how they'd feel about signing up for a Walmart subscription service like Prime, and whether grocery delivery would be the real draw for them.

n

"I would. I wish they could deliver using my EBT card," said a reader named Rhonda Johnson Lamastus. "I'm disabled and during these crazy scary times it would have been so helpful. I wouldn't have needed to go."

n

There's another thing I hadn't thought of: the Supplemental Nutrition Assistance Program (SNAP), which Walmart already accepts for pickup in 45 states, and which reportedly adds up to nearly $60 billion a year in total expenditures.

n

Anyway, I'm paying close attention to the question of whether and when Walmart+ will launch because I think it's likely a great opportunity for small business owners who rely on Amazon and Walmart for distribution.

n

Anything that leads to more competition between these behemoths should benefit smaller businesses, at least in the short-term.

n

But what if the war for dominance in low margin retail businesses is actually destined to be fought on the lowest margin battlefield of all: groceries?

n

I admit, I didn't see the angle--but I'm intrigued that a reader did.

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pageInfo.articles = [{"inc_headline":"Still Waiting for Walmart's Big Announcement? A Smart Walmart Customer Just Explained the Delay","inc_homepage_headline":"Still Waiting for Walmart's Big Announcement? A Smart Customer Just Explained It All","inc_homepage_headline_ab_test":null,"inc_twitter_headline":"Wait. What if this is the real battlefield? @billmurphyjr","inc_newsletter_headline":"Walmart's Still Hasn't Made Its Big Announcement. But Here's What Some Smart Customers Just Figured Out","inc_rubric":null,"inc_title":"Still Waiting for Walmart's Big Announcement? A Smart Walmart Customer Just Explained the Delay","inc_custom_byline":null,"inc_deck":"I only wish I'd thought of this. But I'm happy to give credit where it's due.","inc_homepage_deck":"I only wish I'd thought of this. But I'm happy to give credit where it's due.","inc_sharing_deck":null,"inc_clean_text":"

I'll admit, I've been stumped. Stymied, even.

n

Try as I might, I couldn't put my finger on the real reason why Walmart hasn't launched its long-rumored subscription service, Walmart+.

n

I mean, I've been covering business, entrepreneurship and investing for a long time. And if I were to pick just one piece of advice and insight that I've heard, it's this: "All else being equal, in business, a subscription model wins."

n

It's almost always easier and more efficient to get customers to sign up for your product or service once, and pay automatically each month, than it is to try to sell to them over and over.

n

Amazon figured this out 15 years ago, with Prime, which reportedly has 150 million members mostly paying $119 per year for the privilege. Costco brought in $3.35 billion in membership fees last year.

n

So why hasn't Walmart done it? It should be "found money," right?

n

Well, it turns out, maybe the smart thing to do was to ask some Walmart customers.

n

Let me explain. Recently, I wrote an analysis of why Walmart might be delaying the launch of Walmart+, which has been described as its purported Prime-killer.

n

This came after Walmart CEO C. Douglas McMillon talked about subscription models on a recent earnings call. Among the possibilities I explored:

n

Some kind of technical or marketing delay.

t

The theory that increasing its subscription-based online sales could cut into the habits of customers who are already shopping at Walmart in person, thus harming the value of the brick-and-mortar stores that Walmart has spent decades building.

t

The fact that in going against Amazon, Walmart is facing a competitor with a massive built-in advantage: an incredibly profitable non-retail business, AWS, that can more than make up for any short-term deficit (or even a long-term one) in low-margin or even unprofitable retail sales.

n

Leave it to an Inc.com reader, Dean Anderson, who came across my article, tracked me down, and laid out a brilliant analysis that I hadn't thought of:

n

I would add Walmart+ in a New York minute, for unlimited groceries. I would have them deliver groceries once a week. Doing the math, that means $90/year for W+ equals about $1.75 a week.

n

I can't get groceries to my house for less than $10. So, what family wouldn't take that deal? That's why they are delaying. It's groceries.

n

It would also undermine Instacart, that they just struck a deal with, which isn't affordable on a weekly basis.

n

If W+ does not include unlimited grocery delivery I will not subscribe. If it does, I'm immediately signing up.

n

This is the real delay. I rest my case.

n

I have to say, this suddenly makes a lot of sense. And I'm happy to give credit for the theory.

n

I reached out to Walmart for comment, but haven't heard anything back.

n

So, I started asking other Walmart customers how they'd feel about signing up for a Walmart subscription service like Prime, and whether grocery delivery would be the real draw for them.

n

"I would. I wish they could deliver using my EBT card," said a reader named Rhonda Johnson Lamastus. "I'm disabled and during these crazy scary times it would have been so helpful. I wouldn't have needed to go."

n

There's another thing I hadn't thought of: the Supplemental Nutrition Assistance Program (SNAP), which Walmart already accepts for pickup in 45 states, and which reportedly adds up to nearly $60 billion a year in total expenditures.

n

Anyway, I'm paying close attention to the question of whether and when Walmart+ will launch because I think it's likely a great opportunity for small business owners who rely on Amazon and Walmart for distribution.

n

Anything that leads to more competition between these behemoths should benefit smaller businesses, at least in the short-term.

n

But what if the war for dominance in low margin retail businesses is actually destined to be fought on the lowest margin battlefield of all: groceries?

n

I admit, I didn't see the angle--but I'm intrigued that a reader did.

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I'll admit, I've been stumped. Stymied, even.

n

Try as I might, I couldn't put my finger on the real reason why Walmart hasn't launched its long-rumored subscription service, Walmart+.

n

I mean, I've been covering business, entrepreneurship and investing for a long time. And if I were to pick just one piece of advice and insight that I've heard, it's this: "All else being equal, in business, a subscription model wins."

n

It's almost always easier and more efficient to get customers to sign up for your product or service once, and pay automatically each month, than it is to try to sell to them over and over.

n

Amazon figured this out 15 years ago, with Prime, which reportedly has 150 million members mostly paying $119 per year for the privilege. Costco brought in $3.35 billion in membership fees last year.

n

So why hasn't Walmart done it? It should be "found money," right?

n

Well, it turns out, maybe the smart thing to do was to ask some Walmart customers.

n

Let me explain. Recently, I wrote an analysis of why Walmart might be delaying the launch of Walmart+, which has been described as its purported Prime-killer.

n

This came after Walmart CEO C. Douglas McMillon talked about subscription models on a recent earnings call. Among the possibilities I explored:

n

Some kind of technical or marketing delay.

t

The theory that increasing its subscription-based online sales could cut into the habits of customers who are already shopping at Walmart in person, thus harming the value of the brick-and-mortar stores that Walmart has spent decades building.

t

The fact that in going against Amazon, Walmart is facing a competitor with a massive built-in advantage: an incredibly profitable non-retail business, AWS, that can more than make up for any short-term deficit (or even a long-term one) in low-margin or even unprofitable retail sales.

n

Leave it to an Inc.com reader, Dean Anderson, who came across my article, tracked me down, and laid out a brilliant analysis that I hadn't thought of:

n

I would add Walmart+ in a New York minute, for unlimited groceries. I would have them deliver groceries once a week. Doing the math, that means $90/year for W+ equals about $1.75 a week.

n

I can't get groceries to my house for less than $10. So, what family wouldn't take that deal? That's why they are delaying. It's groceries.

n

It would also undermine Instacart, that they just struck a deal with, which isn't affordable on a weekly basis.

n

If W+ does not include unlimited grocery delivery I will not subscribe. If it does, I'm immediately signing up.

n

This is the real delay. I rest my case.

n

I have to say, this suddenly makes a lot of sense. And I'm happy to give credit for the theory.

n

I reached out to Walmart for comment, but haven't heard anything back.

n

So, I started asking other Walmart customers how they'd feel about signing up for a Walmart subscription service like Prime, and whether grocery delivery would be the real draw for them.

n

"I would. I wish they could deliver using my EBT card," said a reader named Rhonda Johnson Lamastus. "I'm disabled and during these crazy scary times it would have been so helpful. I wouldn't have needed to go."

n

There's another thing I hadn't thought of: the Supplemental Nutrition Assistance Program (SNAP), which Walmart already accepts for pickup in 45 states, and which reportedly adds up to nearly $60 billion a year in total expenditures.

n

Anyway, I'm paying close attention to the question of whether and when Walmart+ will launch because I think it's likely a great opportunity for small business owners who rely on Amazon and Walmart for distribution.

n

Anything that leads to more competition between these behemoths should benefit smaller businesses, at least in the short-term.

n

But what if the war for dominance in low margin retail businesses is actually destined to be fought on the lowest margin battlefield of all: groceries?

n

I admit, I didn't see the angle--but I'm intrigued that a reader did.

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