From Forbes on June 28, 2016:

Nearly a year after its test launch, Wal-Mart Stores recently revamped its ShippingPass delivery subscription program, rolling back the price of a yearly membership by $1 – to $49/year – and speeding up the delivery time frame from three days to two. At the time of these changes, mid-May, the program appeared to be invitation-only, allowing interested shoppers to sign up for a wait list for membership. As of late June, while ShippingPass is still termed a “pilot” program, Walmart – per its website – has opened up subscriptions to “everyone, no invitation required.”  With Walmart now offering comparable shipping speed at half the price of Amazon’s popular Prime membership, has consumer interest ignited for ShippingPass?

A year ago, as part of Prosper’s monthly consumer survey of more than 6,000 U.S. adults, we asked shoppers to gauge their interest in Walmart’s ShippingPass program. At the time, more than one in ten (12.4%) indicated that they would be “likely” or “very likely” to subscribe to the service. Fast forward a year: while Walmart has sweetened its subscription offering, it seems that interest in the program has only increased marginally with 14.8% reporting in early June 2016 that they would be “likely” or “very likely” to subscribe to the program, rising 18.6% year-over-year. While 14.8% still equates to a substantial number of shoppers – an estimated 21 million households – Amazon Prime recently reached peak membership, encompassing about a third of U.S. adults. Further, as of June, one in ten (10.6%) indicates that they are considering joining Jeff Bezos’ shipping society within the next year, so the Amazon freight train continues to move full steam ahead.

Interest in Walmart Shipping Pass: June 2015 Versus June 2016
While it seems that Walmart faces an uphill battle against, it appears the big discounter could reap some big benefits – demographically speaking – should ShippingPass become a permanent part of its arsenal. Similar to last year’s findings, those coveted Millennials are the most apt to subscribe to ShippingPass (23.4% report they are “likely” or “very likely”). Gen X (17.5%) follows, while interest from the Boomer (7.5%) and Silent (4.8%) generations remains relatively small.

However, Millennials aren’t driving the growing interest in the shipping service; compared to June 2015, the youngest generation’s likelihood to subscribe to ShippingPass has only increased 6.3%, lagging the overall average (+18.6%). Instead, those generally overlooked Gen X-ers (+32.9%) are responsible for the increase, which is still a big positive for Walmart. While Millennials are the “gotta-have” shopper segment and represent significant long-term spending potential, the buying power of Gen X shoppers – with their higher incomes and larger family sizes – is here and now. For instance, over the last holiday season, Gen X accounted for 33% of planned gift spending, far eclipsing Millennial shoppers (at 20%). Bottom line: if Walmart (or any mass merchant for that matter) wants to ring up sales in the short-term, they’d be wise not to overlook Gen X.

Very Likely / Likely to Subscribe to Walmart ShippingPass, by Generation

Attracting both Gen X and Millennial shoppers via ShippingPass would be a boon to Walmart, though, as the discounter’s shoppers tend to skew older than rivals. (And Sears certainly serves as the cautionary tale about the aging customer base.) Currently, two in five (43.0%) of Walmart’s most loyal shoppers are members of the Boomer or Silent generations, much higher than core customers of Target (30.1%) and Amazon (34.6%). So it appears that the newer, faster ShippingPass program has presented itself as an opportunity to reinvigorate Walmart’s core shopper base if the retailer is able to capitalize on the interest in the program (and commit to it beyond the current “pilot” phase). Although the discounter is facing steep competition from Amazon Prime, in this new era of disruptive retail, Walmart can’t afford not to take these types of chances.

Pam Goodfellow is Principal Analyst/Consumer Insights Director for Prosper Insights & Analytics™ and editor of the monthly Consumer Snapshot.

Has Wal-Mart’s Revamped ShippingPass Subscription Ignited Shopper Interest?
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