Walmart+ Updates Will Highlight Customer Experience, Not Scale

Need to Know

• Walmart+, the company’s membership program, will eliminate the $35 minimum purchase requirement for free order delivery, catering directly to frequent and loyal customers.
• The store is also expanding the locations at which Walmart+ members can use fuel benefits to include Sam’s Club fuel stations.
• Customer experience is Walmart’s primary focus as it scales up Walmart+ benefits, CEO Doug McMillon says.

Analysis

Walmart is fine-tuning its focus on customer experience with its Walmart+ program, announcing a number of membership updates that demonstrate the company’s commitment to improving the service, rather than quickly scaling it up.

The first improvement to Walmart+, which launched in September of this year, is that users will no longer have to spend a minimum of $35 to access free delivery. Walmart+ members will receive free next-day or two-day shipping on most items, no matter how much they spend, and prices on items will remain the same. Walmart is also expanding the number of locations where Walmart+ members can use their fuel discounts to include Sam’s Club fuel stations (Walmart+ members currently have access to fuel discounts at Walmart, Murphy USA, and Murphy Express fuel stations).

The fine-tuning of Walmart+ is designed to retain existing customers, and to improve the program itself, rather than to scale it up quickly. “One of the worst things we could do would be to sell a bunch of Walmart+ memberships and then have [members] be dissatisfied because they can’t get fast delivery times or spots,” Walmart CEO Doug McMillon said on Wednesday. “This is not a Disney+ or a Netflix membership for streaming. It requires capacity. It requires humans. This is a different product, but it’ll be a Walmart product.”

McMillon added that the elimination of the $35 shipping minimum came in response to  “customers that had purchased a Walmart+ membership that they didn’t expect to have a minimum for e-commerce orders.” He also said that the company had ramped up its shipping infrastructure to keep pace with the increase in the number of small, individual orders that may result from the elimination of the minimum order cost.

Walmart+ costs $98 annually, or $12.95 for a month of service.

Walmart has demonstrated its commitment to responding to consumer needs throughout the COVID-19 pandemic, consistently tailoring and updating its infrastructure—both in-store and online—to offer a more seamless, digital-first customer experience. In September, the company announced it would be redesigning its stores to offer a better omnichannel shopping experience guided by mobile devices; in Canada, Walmart has committed $110 million to online-focused physical upgrades. The company’s commitment to improving its customer experience also extends beyond new store designs and digital-focused infrastructure. Walmart has rolled out new services, such as pet insurance, and new initiatives, like interactive cooking videos, that both diversify its appeal and offer the potential for meaningful consumer engagement.