<\/p>\n
Walmart has figured out something important about Amazon: The battle for shoppers isn’t just about who can get a package to the front door faster. It’s also about becoming part of a customer’s routine.<\/p>\n
That is why Walmart’s latest move to expand its Walmart+ membership program makes a lot of sense. <\/p>\n
The retailer 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 benefits such as free shipping and grocery delivery.<\/p>\n
Of course, on their own, free photo prints aren’t going to make someone abandon Amazon Prime. But that’s not really the point.<\/p>\n
Walmart is trying to make Walmart+ something customers use repeatedly like Amazon. And that’s a smart strategy.<\/p>\n
Walmart and Amazon are fighting for the same customers<\/p>\n
Amazon has spent years turning Prime into a remarkably broad membership proposition. A customer might join for free shipping but keep their subscription because Prime also includes entertainment, shopping events, and other savings.<\/p>\n
Walmart is taking a somewhat different route.<\/p>\n
Its biggest advantage has always been its physical stores. Walmart has thousands of locations, and those stores are already part of the weekly routines of millions of Americans. And Walmart+ gives the company a way to connect that physical footprint to its digital business.<\/p>\n
Related: Major supermarket chain closing more stores<\/p>\n
Meanwhile, it’s easy to argue that Amazon’s greatest strength is convenience. <\/p>\n
Walmart, however, 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.<\/p>\n
Adding more in-store benefits makes the Walmart+ membership feel less like a delivery subscription and more like an everyday financial decision. And that’s exactly what Walmart wants.<\/p>\n
Consumers turn to Amazon for convenience, but Walmart is giving it a run for its money.<\/p>\n
Shutterstock<\/p>\n
The small perks can become a big competitive advantage<\/p>\n
The most interesting part of Walmart’s strategy is that it doesn’t necessarily need to copy Amazon feature for feature.<\/p>\n
Walmart 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 basic psychological advantage Amazon has built with Prime.<\/p>\n
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. <\/p>\n
More Retail:<\/p>\n
Costco sees major shift in member behavior<\/p>\n
Retail chain shuts all locations as legal changes hit industry<\/p>\n
Costco makes major investment in online shopping for members<\/p>\n
Of course, there’s another benefit for Walmart that shouldn’t be overlooked. Its membership program also generates valuable shopping data that can support Walmart Connect, the company’s advertising business. <\/p>\n
Reuters recently reported that Walmart Connect grew 44% in the latest quarter, with Walmart’s membership program helping provide the customer data behind its advertising operation.<\/p>\n
In other words, Walmart+ isn’t simply a loyalty program. It can help strengthen several parts of Walmart’s business at the same time.<\/p>\n
Walmart doesn’t need to beat Amazon at everything<\/p>\n
Morningstar analyst Brett Husslein told Reuters, “They’re building it up to the point where it starts to look a bit more akin to Amazon,” referring to Walmart+.<\/p>\n
The reality, though, is that Walmart is unlikely to displace Amazon as the dominant online marketplace simply by adding another membership perk.<\/p>\n
But it also doesn’t need to.<\/p>\n
The smarter strategy is to make Walmart+ useful and valuable enough that consumers don’t view Amazon Prime as the automatic choice.<\/p>\n
Maurie Backman owns shares of Walmart.<\/p>\n
Related: Another state just banned a controversial retail pricing practice<\/p>\n
#Walmart #key #move #compete #Amazon<\/p>\n","protected":false},"excerpt":{"rendered":"
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