Dive Brief:
- Walmart is waiving its grocery delivery fees nationwide for customer orders of $50 or more through October 31, a company spokesperson confirmed to Grocery Dive.
- To secure the deal, customers type in a special promo code ("HOMEFREE") when checking out. There is no limit on how many times customers can use the code.
- Walmart charges $7.95 for next-day delivery and $9.95 for same-day delivery, with an order minimum of $30. Groceries are delivered within an hour of the delivery time customers choose.
Dive Insight:
Walmart’s decision to roll out this promotion comes soon after it announced the expansion of its Delivery Unlimited plan to 1,400 more stores in 200 markets this fall. Waiving its fees should motivate more people to try home delivery and, ideally for Walmart, migrate to the new subscription service, which costs $98 annually or $12.95 a month.
Signing on to a grocery subscription plan can lock in customer loyalty, with shoppers utilizing the service regularly to get the most out of the money they're spending with a grocer. Convincing customers to add another monthly fee to their lives is a challenge for grocers, so Walmart wants to first prove out the value of its service.
Walmart's promotion is an answer to its many delivery competitors. In June, Kroger began testing 30-minute delivery for $5.95 an order. That same month, Target expanded same-day delivery through Shipt to 47 states, charging a $99 membership fee per year or $9.99 per order. Instacart has continued to gain ground with its rival Instacart Express service for $99 a year, and is now encroaching on Walmart's click-and-collect territory as well.
Delivery hasn't been Walmart's primary focus to date. The retailer’s grocery pickup service is on track to hit more than 3,000 stores and will account for 33% of its online business by next year, according to financial firm Cowen. The infrastructure for store pickup is easier and less expensive for retailers to implement, but delivery provides an extra level of convenience for time-strapped customers.
Promotions like Walmart's latest could be the motivation shoppers need to try grocery delivery. As more customers become familiar with delivery and begin to rely on the convenience it provides, the industry could see e-commerce adoption accelerate, moving it closer to the $100 billion mark Nielsen and the Food Marketing Institute have projected by 2022.
