When Sam Walton founded Walmart in 1962, he used a combination of low prices, tight margins, and scale to undercut the competition and grow it into the No. 1 company on the Coins2Day 500.
The Bentonville, Arkansas retailer is using a similar strategy—at least in terms of undercutting price—to grow Walmart+, which launched Tuesday, into an e-commerce titan.
For $98 per year, Walmart+ subscribers will get free unlimited delivery as well as discounts at its gas stations. That compares to the $119 annual price tag of Amazon Prime.
So can Walmart+ actually threaten Amazon Prime? To find out, Coins2Day and SurveyMonkey polled 2,717 U.S. Adults on their likelihood to use the service.*
Our polling data suggest a strong Walmart+ launch: Among U.S. Adults, 27% say they’re likely to subscribe. That could translate to tens of millions of signups.
And Amazon Prime could lose members in droves to Walmart+. Amazon Prime members (31%) are more likely than non-Prime members (19%) to say they’ll sign up for Walmart+.
Among Amazon Prime members, 40% of those earning under $50,000 say they’d likely sign up for Walmart+. That group might be unlikely to pay for two subscriptions, and could drop Prime altogether. That’d end up a massive blow to Prime’s 112 million U.S. Membership base.
Walmart has spent billions to boost its e-commerce business: Just look at its $3.3 billion purchase of Jet.com in 2016. And it’s likely to convert a lot of those online shoppers into subscribers: Among Walmart.com shoppers, 41% say they’re likely to subscribe to Walmart+.
But it’s frequent in-store Walmart shoppers who are the most likely to say they’ll sign up for Walmart+. Among weekly in-store Walmart shoppers, 43% are likely to get Walmart+. 32% of monthly shoppers say the same.
With such a huge chunk of in-store shoppers likely to subscribe, it does beg the question: Would Walmart+’s growth undercut the company’s in-store sales and traffic? Amazon Prime, which didn’t evolve from a brick-and-mortar operation, isn’t comparable here.
Whatever’s in store, Walmart+ is likely to build a massive membership base and a recurring revenue stream that will make shareholders happy. It’s set up for early success.
*Methodology: The Coins2Day-SurveyMonkey poll was conducted among a national sample of 2,717 adults in the U.S. Between July 13-14. This survey’s modeled error estimate is plus or minus 3 percentage points. The findings have been weighted for age, race, sex, education, and geography.
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