THE CLARUS Blog

Retail Recap Q3 2020: The Launch of Walmart+, More Payment Options at Starbucks, and Prime Day in October

Many customer loyalty experts believe changes in consumer behavior will persist beyond the pandemic for at least the next year.

As a result, our new consumer reality has leveled the playing field for all retailers.

From a loyalty perspective, in the third quarter we saw:

  • The launch of Walmart+, a premium loyalty program that could rival Amazon Prime.
  • Starbucks implemented changes to allow more payment options
  • What Prime Day’s delay could mean for retailers.

We’ll cover these items in our third edition of Retail Recap for 2020.

Let’s take a closer look:

 

Walmart Launched a Premium Loyalty Program That Will Change Retail Forever

The Sept. 15 launch of Walmart+ will play a huge role in the loyalty world this year and beyond.

Our CEO Tom Caporaso talked to CNBC about it in the above video.

Walmart+ is like Prime in that it’s a premium loyalty program that consumers can sign up for in exchange for valuable benefits.

But the two programs are unique which will be key for Walmart.

Amazon holds the upper hand as far as number of products available for fast, free shipping.

On the other hand, Walmart is really leaning into its strength: Brick and mortar stores.

Most Americans live within 10 miles of a Walmart. With 5,000 stores, Walmart has the advantage when it comes to grocery delivery.

Walmart+ includes same-day delivery of groceries, fuel discounts at 2,000 locations, and access to Scan & Go (which allows customers contactless checkouts with their phones so they can skip lines).

And its annual fee is $98 ($21 less than Prime).

We talked to various loyalty experts to find out and here’s what they had to say about Walmart+.

Some of those experts believe Walmart+ will fare better than Prime in the hard goods spaces–grocery, household products, etc.

If early returns are any indication, Walmart+ could be well on its way to reaching membership levels of Prime: Consider that in the first two weeks since Walmart+ launched, 11% of Americans have become members.

 

Starbucks Listened to Members by Expanding Payment Options

Starbucks listened to its customers and adjusted its payment options to allow members of its Rewards program to engage easier.

One of the ongoing requests regarding the program was to make it easier for members to use the program, regarding payment flexibility in its rewards program.

Starbucks Rewards members have always had to use pre-loaded gift cards for payment.

But, last month Starbucks added payment options for its Rewards members.

Now, customers can link their credit or debit cards, or PayPal accounts to pay within the app.

If program members want to pay in person, they will be able to also use cash, credit, or debit cards, or select mobile wallets and still earn points.

There is a reason why Starbucks has more than 19 million Rewards members.

Listening to customers goes a long way for brands.

And Starbucks showed why that is so important.

 

Amazon Changed the Holiday Shopping Season by Hosting Prime Day in October

Since Amazon moved its Prime Day annual event from mid-July to mid-October (Oct. 13-14) this year, it could have an impact on other retailers as well.

In the past, retailers have tried to tie into Prime Day in July by offering special sales of their own.

Now that Prime Day will be in mid-October, it could signal the unofficial start of the holiday shopping season.

This could motivate other retailers as well to offer special deals as well as promoting their loyalty programs in unique and engaging ways.

Since there has been such a consumer shift to online shopping, look for a variety of digital offers tied to retail loyalty programs during this holiday season.

We conducted a 2020 Prime Day Data Study where we surveyed 2500 consumers to get their thoughts on Amazon, Prime Day, and holiday shopping.

If you want the latest 2020 Prime Day Statistics, get the report here.

As we wind 2020 down, the silver lining for retailers heading into 2021 is that consumers are very willing to become members of multiple premium loyalty programs.

Consider that 65% of consumers said they would join another premium program this year even if they were already enrolled in another one.

 

Key Takeaways

Focus on what makes your brand unique that provides value to your customers.

Be different.

Amazon showed the world the power of premium loyalty when it started Prime in 2005, adding a stream of attractive program benefits over the years.

Now, Walmart+ launched and it looks like it could be a premium loyalty force to be reckoned with. The program’s bread and butter (grocery, household products) differs from Prime (media streaming, health tracking).

Walmart+ also shows that retail is catching up to this trend.

Meanwhile, Starbucks continues to power ahead with its Rewards loyalty program by simply listening to its customers and addressing pain points.

Prime Day’s October slot this year could heavily impact the holiday shopping season and have a ripple effect on other retailers.

Thinking about premium loyalty in 2021?

When you have Walmart, the world’s largest retailer by revenue, and Amazon, the world’s largest online marketplace, both invested in premium loyalty programs, it could signal other retails joining the fray.

 

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