Online retailers and eCommerce giants have been some of the best-performing stocks on the market so far this year. Amazon has been one of the biggest winners thus far, and for a good reason, but its seen plenty of competition from other retailers with strong online presences as well. Walmart (NYSE: WMT) is one of those companies whose eCommerce business has seen significant growth over the past few months thanks to the pandemic. Recently, Walmart unveiled its long-anticipated subscription service, Walmart+, which is expected by many analysts to bring in hundreds of millions if not more in extra revenue in the future.
While Walmart has tried to do its own subscription program for a while now with little success. However, the consensus surrounding this particular iteration seems to be extremely optimistic this time around. Walmart has gone on to say that Walmart+ will be going live on September 15 across the United States, costing exactly $98 per year or around $13 per month. Shareholders don’t know exactly how much the program is expected to generate in terms of revenue, but it’s expected to be a pretty sizable figure.
Members who subscribe to the Walmart+ program will receive free home deliveries for a variety of products if they spend at least $35 per order. This includes groceries, which is a major selling point for subscribers. At the same time, they can also receive discounts at Walmart gas stations as well as access to an app that can let them skip the checkout line altogether. For a lot of frequent Walmart shoppers, this subscription program is expected to a pretty appealing offer overall.
“Customers know they can trust us and depend on us, and we’ve designed this program as the ultimate life hack for them. Walmart+ will bring together a comprehensive set of benefits where we see the greatest needs from our customers and where our scale can bring solutions at an unprecedented value,” said Janey Whiteside, Walmart’s chief customer officer in an official statement from the retailer.
Shares of Walmart shot up as much as 7.5% overall in light of the news. Walmart+ has been anticipated for a long time by investors, with many hoping that the new subscription service could seriously compete with that of other programs such as Amazon Prime. Considering that both programs have some degree of overlap and both are targeted at a similar demographic in terms of their cost. As such, many analysts expect that customers will have to choose to take either one or the either, with Walmart+ likely siphoning a solid chunk of Amazon Prime’s total market share.
Walmart Company Profile
America’s largest retailer by sales, Walmart operates over 11,300 stores under 58 banners, selling a variety of general merchandise and grocery items. It’s home market accounted for 76% of sales in fiscal 2019, with Mexico and Central America (6%), the United Kingdom (6%), and Canada (4%) its largest external markets. In the United States, around 56% of sales come from grocery, 33% from general merchandise, and 11% from health and wellness items. The company operates several e-commerce properties apart from its eponymous site, including Flipkart, Jet.com, and shoes.com (it also owns a roughly 10% stake in Chinese online retailer JD.com). Combined, e-commerce accounted for about 5% of fiscal 2019 sales. – Warrior Trading News
