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.
This is an excerpt from Coins2Day Analytics, an exclusive newsletter that Coins2Day Premium subscribers receive as a perk of their subscription. The newsletter shares in-depth research on the most discussed topics in the business world right now. Our findings come from special surveys we run and proprietary data we collect and analyze. Sign up to get the full briefing in your inbox.