When Sam Walton founded Walmart in 1962, he used a combination of low prices, tight margins, and scale to undermine the competition and make it the number one company on the Fortune 500 list.
The Bentonville, Arkansas, retailer is using a similar strategy, at least in terms of under-price pricing, to turn Walmart +, which launched Tuesday, into an e-commerce titan.
For $ 98 per year, Walmart + subscribers will get unlimited free delivery, as well as discounts at their service stations. That compares to Amazon Prime’s $ 119 annual price.
So can Walmart + really threaten Amazon Prime? To find out, and SurveyMonkey surveyed 2,717 American adults about their likelihood of using the service. *
Our survey data suggests a strong launch for Walmart +: Among American adults, 27% say they are likely to subscribe. That could translate to tens of millions of records.
Amazon Prime members (31%) are more likely than non-Prime members (19%) to say they will sign up for Walmart +.
Among Amazon Prime members, 40% of those making less than $ 50,000 say they will likely sign up for Walmart +. That group is unlikely to pay for two subscriptions and could remove Prime entirely. That would end up as a blow to the 112 million Prime members in the United States.
Walmart has spent billions to boost its e-commerce business; Just look at the $ 3.3 billion purchase of Jet.com in 2016. And many of those online shoppers will likely become subscribers: Among Walmart .com shoppers, 41% say they are likely to subscribe to Walmart + .
But it’s the frequent shoppers at the Walmart store who are most likely to say they will sign up for Walmart +. Among weekly Walmart shoppers in store, 43% are likely to get Walmart +. 32% of monthly buyers say the same.
With a large number of shoppers in the store likely to sign up, the question arises: Would Walmart + growth undermine the company’s in-store sales and traffic? Amazon Prime, which did not evolve from a traditional operation, is not comparable here.
Whatever is in store, Walmart + is likely to create a massive membership base and a recurring revenue stream that will make shareholders happy. It is set for early success.
