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Walmart Cuts Walmart+ Subscription Cost for Low-Income Shoppers
Introduction: Helping Low-Income Households Save on Walmart+
Walmart has announced that it is reducing the cost of its subscription service, Walmart+, for Americans who receive food stamps and other types of government assistance. The move is aimed at growing the program and catering to price-sensitive shoppers. Starting July 20, eligible customers can pay $49 a year or $6.47 per month for Walmart+ compared to the usual price of $98 a year or $12.95 per month.
Retaining Shoppers in a Price-Sensitive Market
Walmart's decision to reduce the cost of Walmart+ is an effort to capture and retain shoppers who may be more likely to skip or cancel services with recurring fees. Given the current economic climate, many families are feeling the burden of higher grocery bills. Walmart recognizes the increase in price sensitivity among its customers and aims to provide an affordable subscription option that meets their needs.
Expanding Access to Walmart+ for Low-Income Shoppers
With the discounted price, Walmart+ is now within reach of more low-income shoppers. According to the United States Department of Agriculture, over 41 million Americans received funding for food through the Supplemental Nutrition Assistance Program (SNAP) in 2022. While not all SNAP recipients will qualify for the discount, the reduced membership cost will enable a larger portion of low-income households to access the benefits of Walmart+.
Competition with Amazon Prime
Walmart+ was launched in 2020 as a direct competitor to Amazon Prime. With Walmart's affordable pricing, free shipping, fuel discounts, access to streaming service Paramount+, and unlimited deliveries of online orders, the program aims to attract and retain customers on Walmart's website and in stores. However, Walmart+ still lags behind Amazon Prime in terms of membership count, which is estimated to be around 170 million in the U.S., compared to Walmart+'s estimated 12 million members.
Walmart's Efforts to Support Low-Income Shoppers
In addition to reducing the subscription cost, Walmart has made it easier for families receiving food aid to shop online by accepting SNAP online in all 50 states. This allows eligible customers to add their benefits card to Walmart's app or website and purchase groceries online or through curbside pickup. By expanding the subscriber base of Walmart+, the retailer not only generates revenue from monthly and annual fees but also gains valuable insights into customers' preferences and purchases, which can be used to enhance its analytics tools and advertising business.
Conclusion: Impact on New Businesses
Walmart's decision to reduce the cost of its Walmart+ subscription service for low-income shoppers has significant implications for new businesses entering the market. Here's a "hot take" on how this development could impact them:
Gaining a Competitive Edge
With Walmart's move to cater to price-sensitive shoppers, new businesses will face fierce competition, especially in the retail and online subscription markets. Walmart's already established brand, extensive product offerings, and competitive pricing put them in a strong position to attract and retain customers. This means new businesses will need to distinguish themselves through innovation, unique value propositions, and exceptional customer service to stand a chance against such a large and well-known competitor.
Tapping into the Low-Income Market Segment
Walmart's decision also highlights the potential of targeting low-income households. By offering a discounted subscription, they are tapping into a large customer base that has traditionally been underserved by subscription-based services. New businesses aiming to target this segment should consider pricing strategies that cater to the financial limitations of low-income shoppers. Additionally, they should focus on providing products and services that address the specific needs and challenges faced by this market segment.
Learning from Walmart's Customer Insights
As Walmart expands its subscriber base through affordable subscriptions, they gain access to valuable customer insights. This allows them to refine their offerings, enhance their analytics tools, and improve their advertising business. New businesses can learn from this approach by prioritizing data collection and analysis. By understanding their customers' preferences and purchasing patterns, new businesses can make data-driven decisions that enable them to better serve their target audience.
In conclusion, Walmart's decision to cut the cost of Walmart+ for low-income shoppers presents both challenges and opportunities for new businesses. Competing against Walmart's established presence requires innovation and differentiation, while targeting the low-income market segment and leveraging customer insights can open doors to success. Adaptability, creativity, and a customer-centric approach will be crucial for new businesses hoping to thrive in this evolving landscape.
Article First Published at: https://www.cnbc.com/2023/07/20/walmart-cuts-price-of-walmart-for-recipients-of-food-stamps-other-aid.html.svg)
