Walmart’s membership program, Walmart+, is driving growth for the company as it navigates a challenging economic landscape. In the latest fiscal year, customers who belong to the subscription-based service accounted for nearly 50% of spending on Walmart’s website and app in the US.
The program has seen significant gains, with members shopping twice as much and spending nearly three times as much as non-subscribers. This growth comes at a helpful time for Walmart, which disappointed investors with its outlook for the year ahead before President Trump announced tariffs on goods from around the world.
Walmart+ is considered a “frequency driver,” meaning it encourages customers to shop more frequently, leading to higher profits and lower grocery prices. The program also provides valuable insights into customer behavior, allowing Walmart to inform product placement decisions and pitch itself to advertisers.
The company expects an update on its retail business and alternative revenue streams, including Walmart+, at an investor event in Dallas this week. This will provide insight into the state of the US economy and how retailers like Walmart are responding to escalating global trade conflicts.
Walmart+ has become a key driver of e-commerce growth for the company, with online sales increasing by 20% in the most recent quarter. The program’s success is attributed to its competitive pricing and rewards, including free shipping and gas discounts.
As tariffs loom on countries that are major production hubs for Walmart, the company is well-positioned to weather the storm. With its large customer base and ability to absorb costs, Walmart expects to maintain profitability despite the tariffs. The addition of new revenue streams like membership has brought greater profitability and a more loyal customer base, making it easier for the retailer to navigate uncertain economic conditions.
Source: https://www.nbcnews.com/business/business-news/walmart-facing-tariffs-recession-fears-may-secret-weapon-keep-growing-rcna200211