Walmart Reveals Paid Loyalty Program

Walmart this morning announced the launch its much-anticipated paid loyalty program, saying the newly christened Walmart will provide members-only benefits of unlimited home deliveries, fuel discounts and a scan-and-go shopping feature in Walmart stores for an annual $98 fee.

Membership will be available to customers beginning Sept. 15. Paid members of the retailer’s Delivery Unlimited program, which launched last year and is being absorbed by the Walmart program, will be automatically enrolled.

Walmart, which has encountered some scrutiny over how recent introductions of paid offerings fit within a historic emphasis on low prices and low costs, characterized Walmart as a kind of an everyday-low-price approach to consumer’s time and an offering that further leverages its 4,700 stores as assets in an burgeoning omnichannel retail approach.

“We are a company committed to meeting our customers’ needs,” Janey Whiteside, chief customer officer of Walmart, said in a statement. “Customers know they can trust us and depend on us, and we’ve designed this program as the ultimate life hack for them. Walmart will bring together a comprehensive set of benefits where we see the greatest needs from our customers and where our scale can bring solutions at an unprecedented value.”

Walmart benefits, which the company said it intends to add to over time, are as follows:

“Life feels more complicated than ever. Walmart is designed to make it easier—giving customers an option to not have to sacrifice on cost or convenience,” Whiteside said. “We know shopping should fit customers’ needs, not the other way around. We have always been a champion for the right item at the right price, but now it’s more than that. We have the right shopping solutions at the right time too.”

Analysts see Walmart as a strike at competition from Amazon, whose Prime loyalty program has more than 100 million paid members realizing benefits ranging from fast deliveries to streaming TV and access to voice assistants.

“In order to compete, Walmart has to have Amazon-matching e-commerce capability. In order to win, Walmart also has to further leverage its omnichannel capabilities,” said Miya Knights, head of industry insight for Eagle Eye, a London-based digital marketing platform. “Walmart’s offer of same-day delivery bundled with other extras will appeal to online customers, particularly if they are already familiar with the convenience and scope of Amazon Prime. But the option to also buy online and pickup in store, of which Amazon has only in a limited capacity, may well be the game changer.”

Jefferies analyst Chris Mandeville said Walmart could represent a threat not so much to Amazon but to existing brick-and-mortar rivals like Kroger and Target, given what he described as “more limited” omnichannel offerings at the latter companies.

The news of the Walmart launch comes as the Bentonville, Ark.-based mass merchant has also acknowledged interest in pairing with Microsoft to acquire TikTok, the popular Chinese video-sharing app noted for a large base of young enthusiasts and leading e-commerce and advertising features. Analysts see this too as a potential to further differentiate Walmart from traditional rivals while developing marketplace e-commerce and advertising businesses that can better match up against Amazon.

“We believe a potential relationship with TikTok U.S. in partnership with Microsoft could add this key functionality and provide Walmart with an important way for us to reach and serve omnichannel customers as well as grow our third-party marketplace and advertising businesses,” Walmart said in a statement late last week.

TikTok sale speculation ratcheted up in the wake of an executive order issued  by President Donald Trump last month seeking to ban the app in the U.S. were it not sold to U.S.-based interests within 90 days, citing user privacy concerns.