Walmart is one of the biggest retail corporations and one of the most valuable brands in the

world today. It encompasses grocery and hypermarket chains with more than 11000 stores spread
across 28 countries (Bhasin, 2017). Despite providing online and digital retail services,
Walmart’s market supremacy in the global retail industry is unparalleled because of the physical
presence of the organization itself through their brick and mortar stores. However, online retail
giants like Amazon have rapidly expanded their influence in the retail market allowing the
customers the luxury of online shopping and largely basing their competitive advantage on
customer convenience. Due to increasing competition from the online retail companies with the
world shifting to online modes of shopping due to the pandemic, Walmart decided to expand its
influence virtually by introducing Walmart Plus on 1st September, 2020. Walmart Plus is a
membership program designed to create that element of convenience for the customers by
bringing together a conglomerate of in store and online benefits for them, thus saving their
money and time. This membership will provide a subscription service (monthly or yearly
subscription) allowing the customers, especially families to enjoy unlimited free shipping and
delivery costs, fuel discounts etc. It also provides a “Scan & Go” option whereby customers
shopping in stores can scan their items using the Walmart App and use their Walmart Pay to pay
for shopping items in a quick and easier way. Walmart Plus has an online presence as well and
has the strength of more than 2700 stores that offer delivery as fast as the same day, which adds
to the benefit of this service overall as it delivers customer demanded products free of cost within
a day of the order (Walmart.com).

This membership program has been established by Walmart as a tipping point for a number of
benefits to be offered by Walmart to its customers through various product and service offerings
in the future. This new service offering also coincides with and complements Walmart’s already
existing customer service offerings such as curbside pickup, Next Day and two day deliveries.
These services offer the same delivery charges as before, which allows customer a greater deal of
autonomy and choose options according to their needs (Walmart.com). This will strengthen
Walmart’s customer relationships as more need based services are being catered to and it marks
the commitment of Walmart towards its customer needs. Consequently, the depiction of these
values develops a sense of trust between the company and its customers, thus increasing
customer loyalty and brand equity. This service offering also caters to the special needs of the
people nowadays and its market will also be more than usual in the foreseeable future because of
COVID-19. Due to the pandemic, customers around the world have shifted drastically to online
modes of shopping, even for basic household items. This offering not only provides that online
mode of shopping, but provides unlimited, free of cost and quick deliveries so that it does not
take longer for customers to get their required items than it would have had they purchased them
physically in stores. Moreover, it provides contactless delivery which is ideal keeping the
pandemic in perspective, hence the current demand for this facility, especially during the second
wave of COVID-19 globally, is exceedingly high.
The market segmentation of Walmart is essentially on the basis of life cycle stage, occupation
and income approaches. All of these approaches combined basically form the demographic
segmentation. Walmart’s value proposition is that it provides low priced items on its stores that
mainly targets middle class, working population that is looking for convenience in terms of
acquiring their household items such as monthly groceries, electrical appliances, beauty
products, pet supplies etc. Walmart Plus reiterates its low cost market positioning strategy and
extends their value proposition by launching this service for “busy families” and middle class
working population, thus catering to their time and financial constraints by basing this service on
quick deliveries, no delivery charges and discounts on fuel stations. The demand for this service
can also be gauged by looking at last official demographic and income statistics from the most
developed countries in the world such as UK and U.S which reflect that more than 50% of the
population in U.S falls under the middle class category (Martin, 2018). This number is even
higher in UK where about 60% of the total population falls in the middle class category and
58.5% of households are working households with members aged 16 and above (Working and
workless households in UK). The timing of the launch of this service is also essential in terms of
its demand because of the global recession in economies due to COVID-19 which has caused
sizable reductions in salaries and downsizing within companies. So, the timing of this service
would prove to be a pivotal factor in its success as it will retain Walmart’s customer base and
prevent customer switching towards competitors like Amazon and EBay.

Due to Walmart Plus, Walmart would have a first mover’s advantage from its competitors
because it is providing free delivery of items in shorter delivery times irrespective of the size of
the order which is automatically appealing for its targeted customers. In view of these customer
needs in the current pandemic regime, the strategic marketing objectives for Walmart Plus would
be to effectively promote this new service in the market through TV advertisements and
sponsored social media campaigns and through the Walmart website. Secondly, it attempts to
attract new customers for Walmart since people all over the world are shifting to online shopping
as a consequence of the pandemic. They attempt to achieve this by providing free delivery
charges regardless of the order size as opposed to Amazon’s Amazon Prime service which only
allows free delivery after reaching a particular order size. Thirdly, one of the major strategic
marketing objectives of Walmart Plus is to improve their customer relationships by providing
them a long term membership program which increases a feeling of inclusivity in the Walmart
family and provides them convenient and cost effective solutions to specific needs in their busy
daily schedule. This would be consistent with their overall marketing strategy as well, showing
that Walmart cares for its customers by consistently evolving to the market and economic
conditions, thus creating a perception of trust in the customers which would ultimately increase
their customer loyalty and brand equity. Quantitative analysis such as online consumer traffic
and the number of people subscribing for this service would help evaluate the success of this
program. Furthermore, a dissection of this quantitative data by observing the number of monthly
subscriptions and the number of yearly subscriptions would also provide qualitative insights as to
the proportion of customers willing to make a long term commitment to this service.
Additionally, customer surveys would be helpful in gaining qualitative insights on improving
this service and increasing customer satisfaction.

Walmart Plus’s biggest competitor is Amazon Prime which has a relatively larger online
presence but one of Walmart Plus’s biggest success points is its reported price which is about
$20 lower per year than Amazon Prime. This accounts for customer savings and expanding
customer traffic (Morgan, 2020). This cost effective program would also increase customer
awareness and loyalty, provided that it is marketed efficiently and creates a consumer perception
that Walmart is providing innovative and low priced solutions for its target customers in the
current pandemic. This brand positioning also coincides with the positioning of the company as a
customer-centric market leader. However, Walmart Plus is behind from Amazon Prime on
providing streaming services for videos and music and is not compatible with Echo devices
(Morgan, 2020). These additional services justify Amazon Prime’s higher price and its larger
online presence. Moreover, the sustainability of this service in the future might be uncertain
because currently a drastic increase in demand of this service is because of COVID-19 and this
service caters to those specific needs. In the future, when the pandemic comes to halt, customers
would definitely prefer to revert to the in store experience of buying.

It is imperative that Walmart does not create this perception that this service is COVID-centric
only but rather serves as a blessing in the pandemic and is basically an attempt to provide
convenience for its middle class, working customers and expanding their online presence in the
retail market. Moreover, in order to compete well in the long run with Amazon, Walmart Plus
should increase the layers of benefits it provides by providing streaming services as well at a
lower cost which would definitely help Walmart in capturing a larger online customer base. It
should provide streaming services of movies, TV shows, music videos and cartoons as well. The
additional cost in providing streaming services would not be an issue for Walmart as it operates
on economies of scale due to a low cost model through bulk buying from suppliers. This
program will definitely improve customer loyalty with long term subscription commitment and
reestablish Walmart’s supremacy in the retail market. It would allow them to focus more on
improving their physical stores as well which is their core competency.
Appendix:

Type of Segmentation Segmentation Criteria Walmart Plus’s Target

Segment
Demographic Age Working population between
ages 16-64
Lifecycle stage Married couples with children
Income Low and mediocre incomes
Occupation Lower level employees and
manual workers
Psychographic Social Class Middle class

Amazon Prime Walmart Plus

Provides a wider range of services including
streaming services
Costly
Does not cater to specific needs in light of the
pandemic
More services offered hence more chances of
frauds
Has to be more competitive by either adopting
competition based pricing or further expanding
its value proposition to justify higher prices.
Only focuses on quick delivery and no delivery
charges
Cheaper; more suited for middle class
population
Caters to specific needs in light of pandemic
Offers less services with a more specific focus
Has to increase its service offerings in order to
compete well and cannot continue to compete
on low prices otherwise it would not be
sustainable.
 Works Cited

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