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Walmart is piloting a same-day grocery delivery subscription service, dubbed "Delivery Unlimited," that enables customers to pay $12.95 per month or $98 per year to skip the $9.95 per order fee that usually accompanies its online grocery delivery service, TechCrunch reports.
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With the exception of removing the delivery fee, the shopping experience remains the same for shoppers, according to a Walmart FAQ. Walmart has provided no other details beyond confirming to TechCrunch that the service is a pilot operating across a few US markets.
Here’s what it means: Delivery Unlimited adds a new payment option for Walmart’s successful online grocery services and is a direct competitor to services from rivals Amazon and Target.
- Walmart’s online grocery options are popular with customers, and Delivery Unlimited may appeal to frequent shoppers. Walmart stores that offer grocery pickup and delivery attract new customers and grow basket size among customers who try the services, according to Citigroup analysts cited by Yahoo. Now, customers who frequently have their groceries delivered from Walmart may subscribe to Delivery Unlimited to save money, which could help the retailer cement its go-to position among more faithful customers.
- Delivery Unlimited acts as a direct competitor to Amazon Prime Now and Target’s same-day delivery via Shipt. Delivery Unlimited could help Walmart compete for frequent grocery delivery shoppers in markets where Amazon or Target are also available. Because these customers place more orders, they may be more averse to paying flat delivery fees, but this was the only cost model Walmart previously offered. This could have helped its competitors seem more attractive, but Delivery Unlimited removes that advantage.
The bigger picture: Delivery Unlimited is relatively no-frills but could be expanded into a wider, Prime-style subscription service in the future.
The pilot is little more than a different cost structure for grocery delivery, but Walmart should consider adding more benefits. A major expansion the retailer could consider making to the program is to waive the $35 minimum order value shoppers have to meet to get free two-day delivery on nongrocery e-commerce orders for members. The retailer could also offer members discounts on certain products in-store, similar to how Amazon offers Prime members discounts at Whole Foods. While the retailer hasn’t mentioned any plans for growing the service’s benefits in this way, there is a chance that Delivery Unlimited could grow into a Walmart competitor for Amazon Prime in the long term.
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See Also:
- Amazon and Whole Foods have failed to upend grocery
- Amazon is shuttering its food delivery service
- Pop-up shops are paying off for retailers
Source: Business Insider – feedback@businessinsider.com (Gregory Magana)