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From Bloomberg:

"Walmart Inc.’s online subscription service is narrowing the gap with Inc. in a key demographic: affluent shoppers.

"Launched in 2020 as a competitor to Amazon Prime, Walmart+ is resonating with higher-income households eager to fend off inflation. At $98 a year, Walmart+ costs $41 less than Prime and offers many of the same perks, such as shipping discounts and video streaming. Walmart’s subscription service also has benefits Amazon can’t match, including discounted fuel at gas stations around the US.

"In February, 28% of US households with annual income of at least $150,000 were members of Walmart+, up from 13% a year earlier, according to Prosper Insights & Analytics, which conducts monthly consumer surveys. Amazon Prime still has a commanding lead with 77% of those households, up 7 percentage points from the previous year.

"Walmart’s inroads with this cohort mirror what’s been happening in its stores as the company gradually sheds its reputation as a destination for lower- and middle-income shoppers. Attracting and hanging onto wealthier customers is now a key priority for the company, and executives see e-commerce as a big selling point."

KC's View:

This last paragraph is particularly interesting, since it implies that it is at least possible that Walmart, in broadening its appeal and trying to integrate its offline and online businesses, runs the risk of distancing itself from its core shoppers.  I'm not saying this is a foregone conclusion.  Walmart has enormous reach, lots of ambition, and the resources to keep prices low even as it expands its footprint.

Bloomberg notes that there is a predicate for all this:   "Walmart+ is benefiting from the same 'flywheel' effect Amazon experienced when it launched Prime in 2005: As Walmart attracts more shoppers, it lures more brands, which in turn bring in even more shoppers."  In addition, "besides borrowing Amazon’s online playbook, Walmart is capitalizing on a network of stores located within 10 miles of 90% of Americans."  And, Walmart is looking to exploit alternative revenue sources through its retail media network advertising business, which is still smaller than Amazon's but growing.

It is a potent combination.  I still think Amazon Prime, even if more expensive, seems like a more useful service.  And while at least one expert Bloomberg speaks to suggests that the fact that Walmart's online marketplace is just a fraction the size of Amazon's ends up being an advantage because it is easier to navigate, I'm not sure that's true.  (Amazon's problem isn't the plethora of choices, but rather the way in which it all seems cluttered and ad-centric, which is a relatively new problem.)

No surprise.  This is going to be an ongoing and fascinating battle, probably with a fair amount of collateral damage.