Walmart+ is chipping away at Amazon Prime

Walmart+, the subscription service launched by the retailer in 2020 as a competitor to Amazon Prime, is attracting a growing number of higher-income households and younger users, Bloomberg reports. 

Why it matters 

After a couple of years the particular offer of Walmart+, which differs from Amazon Prime in some key areas, has attracted around 18.5 million members, while a recent Morgan Stanley survey found that another 11 million US consumers are “very likely” to subscribe to the service in future. 

It’s a fraction of Amazon Prime’s estimated 168 million members in the US, who spend six times as much on that platform as Walmart+ members do on Walmart, but the profile of many of the latter’s users suggests that the tide may eventually start to flow in Walmart’s direction. 

Takeaways 

• Walmart+ ($98) costs less than Amazon Prime ($139) and offers unique perks like discounted fuel at gas stations.
• The proportion of higher-income households (annual income of $150,000 or more) subscribing to Walmart+ has more than doubled in a year, from 13% to 28%.
• Two-thirds of Walmart+ members are aged 18-44; that compares with 51% for Amazon Prime.
• Industry observers also note that the Walmart marketplace is less crowded than Amazon’s (135,000 merchants vs 2 million), which makes it easier for brand ads to stand out.

Key quote

“Walmart is eating into Amazon’s e-commerce market share and legitimately becoming a competitor. People are seeing Walmart as a viable marketplace, and that wasn’t the case in 2019 or 2020” – Alasdair McLean-Foreman, founder and chief executive officer of Teikametrics.

Sourced from Bloomberg

[Image: Walmart]