Walmart+ Offers Opportunities for Specialty Food Makers

Mark Hamstra | 4 Sep 2020

Walmart’s new Walmart+ subscription service, combined with the expansion of its online Marketplace to include Shopify sellers, could offer opportunities for specialty food makers to expand their presence with Walmart, according to one sales and marketing specialist.

The long-awaited Walmart+ service, which offers unlimited free delivery from stores, among other benefits, for an annual fee of $98, or $12.95 per month, is slated to launch Sept. 15. The service is seen as a competitive response to Amazon Prime, which offers a wider range of services at a higher annual price.

Luke Briggs, a partner at New Nexus Group, a Bentonville, Arkansas-based sales and marketing agency focused on Walmart and Sam’s Club, said he is optimistic about the opportunities for specialty food makers through Walmart’s new offering.

“There’s still a lot to learn, but I think it’s going to be a good program,” he said of Walmart+. “It’s got a lot of energy and research behind it.”

Briggs said Walmart’s ongoing investments in its online platforms could open then door for more manufacturers to earn a place on Walmart’s shelves.

“I think this, along with the integration of Marketplace, will definitely be a positive for small- to medium-sized suppliers who currently not in Walmart,” he said.

Walmart in July began enabling the transition of sellers using the Shopify ecommerce system onto its Walmart Marketplace platform. Shopify, which is used by more than 1 million businesses, offers tools that allow for the creation of online ecommerce storefronts. Allowing these sellers to transition onto the Walmart Marketplace provides a massive pool of customers for those sellers, and also offers more product choices for Walmart’s own customers.

“Shopify has a long history of helping small businesses leverage scale, and we’re proud to be part of the solution that is helping customers and other retailers,” said Jeff Clementz, VP of Walmart Marketplace, in a recent blog post.

As with any ecommerce offering, it’s important for product manufacturers to ensure that their supply chain is ready to support ecommerce orders and that their online content is optimized before they begin to launch online through Walmart, said Briggs.

Suppliers often need to update product imagery or create better product descriptions in order to maximize sales, he said.

“It’s something we do do with our clients quite often—making sure all of their content online is as accurate and compelling as possible,” said Briggs. “The onus is on the suppliers to make sure their content is updated and that their products are available for delivery,” whether that delivery comes from the store, directly from the vendor or from Walmart’s distribution centers.

In the near term, the opportunities are probably greatest for shelf-stable items because of the logistical challenges of shipping perishables and frozen foods, he noted, although grocery deliveries from stores could more easily include such items.

Briggs said he expects that Walmart will leverage its strength in grocery ecommerce to drive the Walmart+ service.

“I can see Walmart … doing some tactics that would drive incremental basket builds within grocery, or within some of their competitive categories where they are probably winning against Amazon,” he said.

Specialty product makers also have the opportunity to potentially translate success on Walmart’s ecommerce platforms into slots on the shelves in brick-and-mortar stores, Briggs said, provided they can drive enough sales volume online.

Another program that Walmart has been testing that could provide opportunities for specialty food makers is its “innovation endcaps,” which feature displays of new, innovative products in clusters of up to about 200 stores. If the products, which have included items such as granola and better-for-you snack bars, are successful, they are sometimes rotated into the retailer’s traditional product sets.

This can be a faster way for niche suppliers to get their products into Walmart’s regular sets, rather than waiting for the company to conduct its periodic category reviews, Briggs explained.

Related: Walmart+ Will Debut This MonthWalmart Pilots Same-Day Delivery.