How Walmart decides which new partnerships and perks to add to Walmart+
While fast-food discounts and veterinary services might seem like peculiar perks to what is primarily a grocery delivery service, the leader behind Walmart’s membership program says the company uses data and an overarching strategy to choose each new offering.
The retailer launched Walmart+ as its long-awaited Amazon Prime competitor in 2020, at a lower price point than Prime and with more of a focus on grocery. Benefits include free shipping with no order minimum, free delivery from stores, early access to promotions, mobile scan and go in-store, fuel savings and Paramount+ video streaming. The service costs $98 per year or $12.95 per month, plus tax.
Over the course of this year, the retailer has added an array of new services to bolster the membership, add value and provide access to services a cash-strapped Walmart customer might not have otherwise. In May, Walmart+ added free veterinary telehealth services to the service with a company called Pawp. Walmart+ Week in June gave members a handful of exclusive offers such as double fuel discounts, 20% back in Walmart Cash on travel and free two-hour delivery. In August, Walmart announced a partnership with Burger King that would give customers a 25% discount on Burger King orders and a free Whopper with any purchase every three months.
“As we think about partnerships and services, there are a couple of things that we think about as we explore who to bring into the fold,” Venessa Yates, a Walmart svp and general manager of Walmart+, told Modern Retail in an interview. “What we want to do is find partners who are complementary to our core brand and our core beliefs as a retailer, and partner with those folks who bring fresh content, who bring a parallel in value to their customers and members and bring a level of credibility, reliability and expertise to the program.”
Walmart+ membership plateaued in early 2023 at around 8 million people — including about a million Walmart workers with free memberships through their jobs — because people didn’t pay to continue past their trial period, leading the company to refocus its benefits and marketing, the Wall Street Journal reported in August. Yates declined to share specific statistics behind the membership, but she said Walmart+ saw double-digit membership growth in the U.S. over the past three quarters and that retention during the first half of this fiscal year was at its highest level since it launched in 2020.
“That means members are choosing us and continuing to choose us time and time and again,” Yates said. “We have strength in acquisition, we have strength in retention, we’re continuing to leverage our delivery capabilities and continue to expand into more households with our delivery proposition.”
Important to this, she said, is keeping the price stable — it hasn’t changed since 2020 — in addition to using data and insights to bring new value to the program and understand where to go next.
Yates explained to Modern Retail how Walmart used customer research to decide to pursue the Burger King and Pawp partnerships.
When her team was considering the Burger King partnership, Yates said the company knew almost all of its members had visited a quick-service restaurant in the prior three months and that its members would spend twice as much as the average consumer on quick-service restaurants. Additionally, a third of Burger King’s restaurants are within two miles of a Walmart store, according to Yates. “If you think back to credibility and reliability, accessibility, value synonymous with brand — Burger King just was one of those kind of no-brainer partners to go after as we thought about a benefit that we could put in the program.”
Through a previous program with Pawp in 2023 where Walmart+ offered subscribers unlimited access to veterinary telehealth to members, Walmart found about 75% of its members had pets, and that program had the highest redemption rate of any of its limited-time offers last year. “We realized pretty quickly that it would make absolute sense that we would bring this into what we would call an everyday or a permanent benefit,” Yates said. Also, bringing on Pawp would create more of an ecosystem for pet owners as a retailer that also sells pet products and prescriptions.
More retailers and platforms are bolstering their subscription services with new perks. Bryan Gildenberg, founder and CEO of Confluencer Commerce, said the key to successful membership programs is to do one or two core things very well, as Prime did with free shipping. The core value proposition of Walmart’s membership, he said, is the free delivery from Walmart’s website rather than the other discounts or add-ons.
“The success of Walmart+ is way more contingent on the success of Walmart.com than it is on Walmart+ as a membership program; the more people who find Walmart.com a valuable place to shop, the more valuable Walmart+ will be,” Gildenberg said. “I think the rest of the stuff is a nice-to-have, it’s good for creating news about the program but probably doesn’t make a significant difference in the medium to long term.”
But here’s how Yates explains the value Walmart is trying to offer with these additions: the deals are designed to save people money on services they are likely to use. Like much of what Walmart does, affordability and value have been central to the program; in July 2023, Walmart began offering half-price Walmart+ memberships to customers on government assistance programs.
“We’re really proud of that program,” Yates said. “I think about it as providing access to anybody who needs it and who needs access to our program. We’re really proud of the way Walmart+ Assist has landed with our members and customers. If I think about folks who may be homebound or folks who are carrying their groceries on the bus each day or can’t afford streaming services, Walmart+ Assist is a really fantastic way to bring delivery, or to bring fuel savings or to bring streaming to those who may not have had access to it before.”
It’s a growing realization from the major players trying to grow their subscription services. Amazon, for example, has been trying to market Prime more thoroughly as something more than just free delivery but a series of services to make life easier for its customers, running ads last year aiming to give a more complete picture of all the subscription service has to offer.
Yates said the team behind Walmart+ faces the challenges of inflation, macroeconomics, shorter shopping windows and the election and is trying to move through by offering simplicity to the shopping experience.
“What we’re really trying to do is continue to test and to learn and to figure out what our sweet spot it is amongst all of that noise,” Yates said. “If we can continue to find ways to make it really seamless and frictionless for our members to engage with Walmart and to engage with all that Walmart+ has to offer, I feel like we’ll overcome any of those kind of macro challenges that we are faced with.”