Retailers Pursue Long-Term Commitments to Shoppers

Marketers want to hook consumers on monthly or annual memberships with perks. 

January 27, 2021

BENTONVILLE, Ark.—Retailers are finding shoppers are willing to make a longer-term commitment by signing up for monthly or annual memberships, Drug Store News reports. Subscriptions to Amazon Prime and Walmart+ are soaring, with members receiving exclusive deals, free delivery and free shipping, among other perks.

As more consumers embrace e-commerce, these subscription-based programs can be essential to growing a retailer’s online business. “However, retailers need to carefully design initiatives to make sure they work as intended and meet consumer expectations over time,” the report said.

The monthly subscription model has exploded in recent years. Consumers can sign up for music platform access like Spotify, streaming services (like Disney+ and Netflix), meal kits, clothing kits, and snack kits.

The grandaddy of them all is Amazon Prime, which debuted in 2005 and registered more than 150 million members in 17 countries last January 2020. The monthly or yearly fee gives members free shipping, movies/TV shows/music streaming, exclusive deals, and discounts at Whole Foods Market.

In September, Walmart launched its Walmart+, which offers free shipping, free delivery from stores, member discounts on fuel and mobile scan-and-go services. Giant debuted its subscription service this month called Choice Pass. The annual or monthly membership gives members free delivery and free order pickup. Hy-Vee-Plus has an annual fee and offers savings on deliveries and pickups, as well as exclusive deals.

Other retailers toying with membership services include Albertsons, SpartanNash and Kroger. Third-party delivery companies DoorDash, Instacart and Shipt have their own programs with participating retailers.

“Retailers are doing a nice job experimenting with member efforts. However, it’s important that strategies are based on a solid analysis of what consumers want. For example, programs need to meet consumer expectations with transparency, value and convenience—not unlike what is important to shoppers in buying products,” Drug Store News noted.