Walmart just made a key move in its Amazon battle
Walmart has figured out something important about competing with Amazon: The battle for shoppers isn’t just about who gets a package to the door faster. It’s about becoming part of a customer’s routine.
That helps explain why the retail giant is expanding Walmart+ again. Launched in 2020 as Walmart’s answer to Prime, the membership program keeps adding perks. The company recently added new in-store benefits, including 25 free 4-by-6 photo prints each month and savings on an eligible Money Center transaction every three months. Those perks join existing Walmart+ benefits such as free shipping and grocery delivery.
On their own, free photo prints aren’t going to make someone cancel Amazon Prime. But that’s not really the point.
Walmart is trying to make Walmart+ something customers use repeatedly, the way Amazon has made Prime part of everyday life. Amazon spent years turning Prime into a broad membership proposition. A customer might sign up for free shipping, then stay because Prime also includes entertainment, shopping events, and other savings.
Walmart is taking a somewhat different route. Its biggest advantage has always been its physical stores. With thousands of locations across the U.S., those stores are already part of the weekly routines of millions of Americans. Walmart+ gives the company a way to link that physical footprint to its digital business.
Amazon’s greatest strength is convenience, but Walmart can offer a different version of convenience: Buy online, get groceries delivered, save on fuel, and take advantage of services you were already going to use anyway. Adding more in-store benefits makes Walmart+ feel less like a delivery subscription and more like an everyday financial decision. And that’s exactly what Walmart wants.
The most interesting part of the strategy is that Walmart doesn’t necessarily need to copy Amazon feature for feature. It needs to give customers enough reasons to think, “I already pay for Walmart+, so I might as well shop at Walmart.” That’s the same psychological advantage Amazon has built with Prime.
The new perks are particularly useful because they connect Walmart+ to services that customers can use in physical stores. And more visits can lead to more purchases.
There’s another benefit for Walmart that shouldn’t be overlooked. The membership program also generates valuable shopping data that helps support Walmart Connect, the company’s advertising business. Reuters recently reported that Walmart Connect grew 44% in the latest quarter, with Walmart+ helping provide the customer data behind its advertising operation. In other words, Walmart+ isn’t simply a loyalty program. It can strengthen several parts of Walmart’s business at the same time.
“They’re building it up to the point where it starts to look a bit more akin to Amazon,” Morningstar analyst Brett Husslein told Reuters.
The reality, though, is that Walmart is unlikely to displace Amazon as the dominant online marketplace simply by adding another membership perk. But it also doesn’t need to.
The smarter strategy is to make Walmart+ useful and valuable enough that consumers don’t view Amazon Prime as the automatic choice.
Maurie Backman owns shares of Walmart.