Walmart Pay isn’t about payments. It’s about relationships

By Aarthi Rayapura January 15, 2016

By Tien Tzuo, CEO, Zuora

Walmart made a big announcement last week about some new check-out functionality in their mobile app, which most journalists have been covering from a mobile payments perspective.

I don’t think that’s the real story, though. Walmart Pay isn’t about saving ten seconds at the checkout counter.

When it comes to the new digital-first “click and mortar” retail experience, I’ve been tracking Walmart for a while now. Most Americans live within twenty minutes of one of Walmart’s 4,600 stores. They’ve got 140 million weekly shoppers, the vast majority of whom are making routine, repeat purchases.

But what does Walmart really know about its customer base? Very, very little, particularly in comparison to Amazon and other digitally native retailers, who track your order history and shopping preferences from Day One. If you log into Amazon right now, I bet you can find the first thing you ever bought on Amazon, which maybe is the first thing you ever bought online.  But as far as Walmart is concerned, their shoppers basically just exist to cart the inventory out of the supercenters.

But lately it sounds like Walmart is making some interesting moves in the right direction. The closer Walmart wraps its customer base to its app, the better — their e-commerce sales have actually been dipping relative to their mobile app usage.

Here are a few things that Walmart shoppers can do with their app right now:

  • Play and pick up recurring online orders
  • Refill  prescriptions
  • Find an item
  • Get  discount alerts

In other words, the Walmart app is slowly but surely getting rid of the traditional pain points of retail shopping. Amazon’s frictionless one-click shopping experience isn’t a nice perk anymore. It’s table stakes for anyone who wants to sell anything, online or off.

Walmart is already experimenting with pick-up orders. Delivery can’t be far behind. All the big retail chains like Walmart and Target are waking up to the fact that while Amazon has around a hundred fulfillment centers, they have potentially thousands of them.

But here’s the real story — for the first time, the Walmart app represents an actual, viable subscriber relationship. One that offers relevant, timely information. One that offers mutual benefits. One that makes routine hassles disappear, in favor of an compelling shopping experience that surfaces discovery and social feedback.

Right now Walmart has 23 million active app users. That sounds like a big number, but it’s only about 17% of its total customer base. The other 83% is essentially a black hole.

But 17% is not a bad place to start.

Head over to the Zuora Academy to learn more on Retail, Payments and the Subscription Economy!