Learn How to Bring Membership to the Mass Market
with Venessa Yates, SVP & GM of Walmart+
With over 4,600 stores and nearly 1.6 million associates in the United States alone, Walmart is the largest retailer in the world. Walmart+, their membership program, is redefining the contours of paid memberships.
I recently had the chance to interview Venessa Yates, Senior Vice President and General Manager of Walmart+, on the main stage at the SubSummit Conference in Dallas, Texas. And I’m delighted to be able to share a recording of our conversation with all of you on the podcast.
In this episode, we’ll uncover the key elements behind Walmart+’s success and the strategies they’ve deployed to foster growth and deliver value. You’ll also learn how Walmart+ adapts to the evolving needs and expectations of today’s consumers to boost engagement, which includes the integration of strategic partnerships into their offering.
The following interview is adapted from my podcast, Subscription Stories: True Tales from the Trenches.
Robbie Baxter: Let’s get right down to it. First of all, what is Walmart+?
Venessa Yates: Walmart+ is our membership program at Walmart. So if you think of all of the things that Walmart does well, think of shipping, assortment, price, and service. Walmart+ is all of that.
So for $98 a year or $12.95 a month, we sell a subscription to all that Walmart has to offer, as well as access to services and benefits from our third-party providers. So we have things like streaming through our friends at Paramount+, we have travel benefits through our friends at Expedia, and recently we also launched a pet telehealth benefit with our partners at Pawp.
So all of that, and then some, is what we call Walmart+.
Robbie Baxter: Yeah, so let’s go back to the beginning of Walmart+. Can you talk a little bit about the origin story of launching it and bring us maybe up to date on some of the key moments of pivot along that journey?
Venessa Yates: Yeah, for sure. At the risk of taking us all back to COVID times, Walmart+ did actually launch in 2020.
And if you think about what it was like even for yourselves and your own families, you might have started prioritizing things a little bit differently. You might have been prioritizing time with your family differently. You might have been traveling differently. You might have been placing orders for your groceries differently.
And Walmart+ was really born out of the idea that customers were telling us, they wanted something different. They wanted something new, and they wanted something that would give them both time and money savings. And so the team did a really nice job of launching with three benefits at the time.
And really taking an opportunity to take a look at the market, take a look at the industry, and hear from our customers about what would be valuable to them, and stood up for the program. And to your point on how things have evolved over time, obviously, we’re out of COVID, which I think everybody is relieved about.
Then we’ve also been looking at what do we do to actually build value with the program over time. So I said we meant we kind of offered three benefits at the time. We then looked at things like expansion into fuel discounts, streaming, free shipping with no minimums, and really took a look at how do our customers spend their wallets over a period of time and what role can Walmart uniquely play to meet those needs. I would say obviously with the same as most subscription businesses, we started with the goal of acquiring customers into the membership program, and that’s still really important to us.
But equally, we look at retention now as a, as a measure of strength of the program and how to keep our members satisfied and realizing that undeniable value we have to offer.
Walmart+ was really born out of the idea that customers were telling us, they wanted something different. — Venessa Yates
Robbie Baxter: You talked about the unique strengths of Walmart that you brought into Walmart+. There are many different retail subscriptions, including a couple that are quite big.
What is Walmart’s unique strategy in this marketplace, and what is unique to Walmart?
Venessa Yates: Yeah, and there’s a couple of things and some might be more unique than others. Others might be pretty consistent with you all in the room as well. But if you think about what we stand for at Walmart, we help people save money and live better.
And both of those are of equal importance to us. And so that kind of underpins everything we do from a membership perspective, making sure we’re looking for ways that provide convenience, seamless experiences, removes friction, which we heard about earlier, and really kind of spending time being members ourselves to understand what we do or what we don’t like about our program and how we might improve those.
I think over the course of the program, looking at ways to differentiate through our people has been really important to us as well. We talk about being a people-led tech-powered, omnichannel retailer, dedicated to helping people save money and live better. And our people genuinely make a difference. For those of you who have or have not worked at Walmart before, every single one of our associate badges says our people make the difference, and we genuinely believe that. And so, a couple of years ago, we gave our frontline associates a free Walmart+ membership because we wanted them to engage in the program in a way that they would fall in love with and be able to speak to existing and potential members about the program, what they love about it, what they’ve seen change, and why they believe in it so much.
And so being able to have 4,600 stores across the country with a, you know, vast array of products is one thing, endless aisles is another, a whole raft of services beyond that even more so. But at the heart of all of that are our people. And our people genuinely care about our customers, and our people genuinely care about our members, and I think that’s something pretty special.
Robbie Baxter: Did you get any feedback from your employees about the program that you’ve used to improve it?
Venessa Yates: We get feedback all the time. And actually, the idea to give our associates the membership was part of the feedback that we received from them as well. We have over a million associates in the US, and so that’s a lot of feedback. And one of the things I love most about Walmart is that there’s a lot of feedback. At Walmart, it doesn’t matter what role you hold or what part of the team you’re on, you are accessible to all of those associates. I love that we get a full tapped in feedback from those associates.
We also get a lot of feedback from our members directly as well. And we do spend a lot of time doing focus groups and surveys to understand what we’re getting right, what we’re getting wrong, and how we might pivot. The Pawp partnership was a really good example of that. So, we did a limited-time offer last year. And it was one of our most successful limited-time offers. We also knew that it would be successful because 75% of our members actually have pets. And because we asked our members the right questions and they responded by taking up the limited-time offer, we knew that doing a permanent embedded benefit would be something that would really resonate.
Robbie Baxter: That’s a good example of learning, but that feels like something where you did proactive research to say, what’s next?
Are there examples of things that maybe surprised you in terms of feedback that you’ve gotten either from your associates or from your members that have resulted in interesting learnings or changes?
Venessa Yates: I don’t know if this would be surprising as such, but we do have Paramount+ Essential as part of our membership program, and that’s been wildly successful for us. But over the course of having that program, we did hear a lot from members saying, what about Showtime? How can I plus up this particular arrangement?
And so the team did a nice job of working with the Paramount folks to bring Showtime into the fold for a slightly higher fee. But that meant the members who did want to engage in that streaming service were now able to, as opposed to relying on one version of the service that they might have before.
Another benefit that we do have is what we call Walmart+ Inhome. And for those of you who don’t know what that is, we have associates who deliver your groceries to your home and put them either in your garage, in your refrigerator, or in your kitchen for you. And that again was born from customer feedback where it was like, how do we have ultimate convenience at our fingertips?
And that’s where we will do the hard work for our customers and members by bringing their groceries to them and packing them away.
Robbie Baxter: I love that because it’s all about that forever promise, taking it as far as you can, and kind of continuing to evolve it. That’s a great example.
Something that I was personally interested in about Walmart+ is that your brand is so associated with being democratic and being for everyone. And a lot of memberships, and I’ve heard a lot about this in the sessions that I’ve been participating in this week, talk about exclusivity, scarcity, and not for everybody. I’m wondering, what do you think about that element of membership that almost comes with the word member and balancing that with your ethos of inclusivity?
Venessa Yates: Yeah, that’s a really great question. Are you aware of the Walmart Cheer? We have a little internal cheer. We spell out Walmart. And at the very end, we say, Who’s number one? The customer, always. And we genuinely believe that. And I’ll circle back into the membership side of it, but that’s at the heart of everything that we do.
If you think about assortment, about everyday low prices, about access to 4,600 stores, or to several hundred and thousands of gas stations, we have access for everybody. It does not matter if you are a member or a nonmember, you get the same level of service, expertise, and people interaction through our entire ecosystem.
And that’s where we think democracy lies and exists. We don’t differentiate on item prices for members versus nonmembers, but in exchange for a membership fee, we will elevate a level of service, we will expedite shipping and services that are made available to you, or we will give you third-party benefits.
So we believe that this is a product in its own right, and for $98 you get a suite of benefits that is a really great value that you can either opt into or if you choose not to, you still have access more broadly across the board.
Robbie Baxter: Yeah, it’s interesting because it’s not an easy thing to straddle. And I imagine when new features are being considered, there must be that question of, does that allow us to love all customers? Is it clearly defined as a differentiated feature, benefit, or does it just feel like cutting the line?
Venessa Yates: Yeah, and there’s two things in there. I think when we think about accessibility, we look at the broad population of America and try to understand where our sweet spot is. And for those of you who know enough about Walmart, I mean, Walmart serves all manners and demographics across the country. And I’m really proud to say that our membership does exactly the same. When we do the slice of our members, and who they are, what they like, where they live, and what they earn, it’s reflective of the true customer base that is Walmart.
But also understanding that helps us really figure out, are there other areas that need a little bit of differentiated application. And one of those is in regard to people who are on government assistance. And around this time last year, actually, a group of us got together to try and understand how we might provide a service to the underserved and help them get on their feet differently.
And so we offer all that Walmart+ has within its benefit proposition at half the price. So $49 a year for customers who are on government assistance. And there’s a verification process that goes with that, and at the end of the day, it’s the entire program that’s available to them. But it’s another way that we’re looking at accessibility more broadly and not getting caught up in who has and who doesn’t.
Robbie Baxter: Yeah, that’s interesting. I like that equity. You picked up the baton at Walmart+ about a year ago. It was already pretty well structured on its way, but also not so old, and lots of change in evolution is still to come.
What is your unique stamp that you’re putting on it, or both because of this particular moment in Walmart+’s journey, but also because of your own background? What are the things that you’re really thinking about and focusing on that might be different from prior leadership or future leadership someday?
Venessa Yates: First, I want to say I’m one of 82 unique stamps that work on this program, and I’m very privileged to have amazing, bright, intelligent people from all sorts of backgrounds working on this program. So my job is very easy in comparison to what they do every day. But as you heard a little bit earlier, most of my background is in merchandising.
I’ve spent 17 years in merchandising, and I think coming into the membership program, what I bought from my advantage point was a couple of different things. One of them is understanding what it means to be a good financial steward of the business. And so for those of you who have been merchants or are merchants today, you understand what it takes to run a Profit and Loss (P&L). You understand the gives and takes that you’re willing to invest in or secure funds for? And everything’s a trade-off. And so part of the conversations we had was, How do you balance this need for innovation and speed with the idea of making sure you’re sustainable long-term for your organization?
And so I would couple that with innovation, staying in front of the customer. In your book, you talked about really knowing what your customer problems are, how to solve them, and what your unique role is in doing that. As a merchant, you’re trying to predict what’s going to be the next product that your customers are going to sell. And so bringing that into the fold of membership has also been something that I’ve brought with me.
There are a couple of things that we do focus on more broadly from a strategy perspective. And one of those is what we call fortifying the foundation. And I kind of talked about it a little bit before, when you’re first starting up, you’re focused on acquiring new members, and that’s really important, right? You want to get the energy, the excitement, and the enthusiasm of your program and bring people into the fold. But what brings people into your program is going to change over time. And you need to be clear that your ability to have a sound foundation is there. And so for us, it’s delivering and executing with excellence. It’s making sure we’ve got safe and secure systems, that we’re treating data correctly, and that we’re working to make sure the base foundation of our program is as good as it possibly can be.
The second is to think about broadening appeal, and that’s where your retention phase comes in. Thinking, how do I keep this interesting? It’s one thing to serve and deliver and to be consistent on the base. But how do I keep you interested and willing to invest that $98 year after year, because you see that undeniable value in the program? So a little bit of product, a little bit of financial stewardship, a little bit of execution, and there’s a lot of parallels between merchandising and membership in that way.
Robbie Baxter: Yeah, the merchant. It’s interesting that the merchandising piece because it is about what’s the next step for them, and what are they doing? Whereas membership and subscription are very much about consistency, and habit formation rhythm.
It’s really interesting to me to think about the role of merchandising in keeping things fresh at the same time as building those steady habits like I would imagine your gas station visits, your groceries, the things that happen on a regular cadence along those new things.
Venessa Yates: Well, and think about the role of tweaking a benefit that already exists. We have free delivery from the store today. We now have express delivery, so you can get your groceries in less than two hours. And you’re seeing an increasing number of people participating in this space of speed as a commodity.
And so I look at all of these as new product launches. How are we enticing and drip-feeding this kind of service element into the equation to make something that might have been consistent and deliverable before even more appealing and attractive?
Robbie Baxter: Yeah, it’s interesting also because I think about a lot of people have been talking about surprise and delight and new stuff, new products and some of the things are brand new, but some of the stuff you’re talking about is just continual tinkering and continual improvement as you realize what they want and you get feedback, or maybe even the team knows what they want to do. But as you said, there are lots of trade-offs and you have to kind of gate the progress.
But I do think that it’s really important to balance those two. It doesn’t all have to be new, but it could be a little better because that’s what keeps people engaged.
Venessa Yates: Yeah, if you think of something as simple, I’m going to pick up groceries for just a second, but I would bet most of you have placed a grocery delivery order from any number of retailers.
And I don’t know about you, but there’s nothing more frustrating than the one thing you’re actually ordering being canceled off the order or the wrong item being sent, and so again, for me, it’s that kind of incremental step change. If we know we have a cancellation rate of X, what are the steps we’re taking to reduce those cancellations if we know that we have a consistent NIL pick on the product Y? How are we working with our merchants and our operators to understand how to close that gap? From an experience point of view, but also on the back end as we deliver those groceries as well. It’s really just looking at it from a true member scope and saying, what frustrates me, or what excites me? And how do I make sure that that’s part of the equation?
It doesn’t all have to be new, but it could be a little better because that’s what keeps people engaged. — Robbie Baxter
Robbie Baxter: I love that. Now, I’m sure a lot of people in the audience are very interested in how Walmart+ thinks about partnerships. You mentioned your partnership with Paramount+, and I’m sure people are thinking, Well, we have a great offering that could be integrated. What do you think about what’s the right next feature to add and whether to build it from within or look into partnerships?
Venessa Yates: Great one. We do have a lot of internally owned assets or benefits that we bring. And how I think about that is, where is our core strength, and where do we need to look outside of our own portfolio at other folks who maybe have more reliability, credibility, strength, or competency in a particular area that isn’t necessarily close to our wheelhouse?
If I think about fuel as an example, Walmart does have owned gas stations, but to expand reach, we knew we needed to partner with folks like Exxon to go a little bit further and make sure we could tap into a lot of our customers and members more broadly. So that, for me, was like an expansion effort.
I mentioned Pawp and Expedia. Travel and pet services aren’t currently within our core remit today. So we wanted to find ways to partner with credible organizations that could be complimentary to what we offer. We sell luggage, travel cosmetics, and personal care. We don’t sell flights, and we don’t sell holidays, but our partners at Expedia do. So we can overlap the two in terms of experience and say, Let’s figure out how to sell travel, and then let’s also figure out how to sell travel accessories and travel goods as part of that equation. With Pawp, it’s the same. We have a lot of customers and members who have pets, from pet food to grooming to bedding and everything in between.
So how do we then partner with the likes of Pawp to say, Let us care for your pets, and then let us treat your pets in the same way. And then we think about Paramount+, an incredible partner to us, and we don’t have streaming capabilities within our core wheelhouse, we are a retailer at our core. And so for us, it was looking at companies who could provide fresh content and were consistently looking at the role of retention in their own effort and a company that could also sit well within the Walmart brand. Again, we can talk about assets and merchandising from that particular space tied to content but these are all kinds of companies that are complementary to what Walmart has to offer every day.
I’m very excited. We have our embedded benefits, which is what I’ve spoken most about today. But we also have these pulse moments of surprise and delight through our limited-time office center. And that’s where some of the smaller benefits or kind of pulse one-offs play a really important role.
Robbie Baxter: Can you give a couple of examples?
Venessa Yates: We’ve had a Spotify partnership where we look at an extended trial to give Spotify access to our members’ Angi Home installation, tax advice, and tax consulting during tax periods. Really looking at seasonality, but then also again, these complimentary partners that pulse in interest for our members without going all in for an embedded benefit that you may not actually need or want to pay for year-round.
Robbie Baxter: Yeah, and it’s probably a good way to test things too.
Venessa Yates: It is. That Pawp was a great example, right? So yeah, we get to kind of test the water there and see how our members resonate with it and decide whether it sticks around for long or not.
Robbie Baxter: Yeah. Sticking to this question about the different features and benefits that you offer and how you incorporate new ones, I think a lot of organizations that have been around for a long time have an issue with too many features. Sort of overwhelming. Maybe some of them aren’t as relevant.
I’m curious about how you think about the bundle of benefits that you offer overall, and specifically how you think about benefits that might drive acquisition versus benefits that drive engagement and retention and habit versus benefits that you say, you know what, maybe this is not a benefit to include into the future.
Venessa Yates: Yeah, I think that’s an age-old equation that we are all going to deal with at some point. And what I love about the subscription industry, it is so busy and noisy at the moment, but it’s inspiring to see how we can all cohabitate in one particular industry. So that’s been really fun.
I think from a benefits perspective, the key for us is making it easy to explain what it is to your members. When you get into a situation where you have to list four, five, six, seven, eight, twenty, twenty-seven, or however many benefits, it becomes really hard for your members to understand the value they’re realizing as part of this proposition. You also run the risk of those members saying, I’m paying an amount of money for all of these benefits I don’t even use. So their value equation then changes. They might have seen value in the first two or three benefits in the first instance, but if over time you’ve added additional benefits that they don’t see value in, they’re going to question what they’re paying for.
So we think of it as a fewer, bigger, better kind of approach. We want to have credible, reliable, and recognizable brands and partners that we work with. We want to be able to execute with excellence, so provide internal and owned assets that we know we can stand up to time and time again. And we want to be able to explain it clearly and easily as well.
And so kind of back to my initial thoughts on saving our customers time and money. That time equation really is around simplicity, removing friction, and making it easy for your members to realize the value of the program that you’re putting forward to them.
And that’s where I kind of put into the conversation, If I’m doing the math for you and you can realize that math, you will see the value, you will feel the consistency, and you will have this emotional connection to the brand and the promise that’s being put forward. But if, as a member, I’m finding it difficult to understand, then I might query, why would I join or why would I stay in a program that I’m not getting the value that I need out of it?
Robbie Baxter: Yeah, you bring up some of the challenges that are plaguing a lot of subscription businesses.
I’ve seen this so many times, of organizations saying, Well, we have the feature, let’s just throw it in there. It doesn’t cost us anything, we can offer it. And how that can sometimes muddy the waters and confuse a member. And if that’s the first benefit that they see, they might say, well, that’s not even a great benefit. And they may not even have the patience to dig deeper and surface those other benefits. So fewer, bigger, better. I really think that’s important.
And then the other question of people doing the math. And that’s a double-edged sword because, on one hand, I’ve seen organizations say that this feature is worth $14.99 and this one’s worth $32, and they kind of list it out that you’re paying $100 and you’re getting $4,852 worth of value.
And most consumers, it makes them wary. It makes them suspicious. Whereas if they see that there are three benefits and I’m using two of them and I can do the math myself, I know I’m saving money.
Venessa Yates: Yeah, I think truth and transparency are really important. And the first part of your comment just now is resonating in my mind over and over is what is the problem that you’re trying to solve for your customer? Is this the feature you want to put into play? Or are you just testing the waters to see what might happen? I’m very proud of my team because they are great tests and learners. And I loved the prior session where it was like, be open to getting it wrong. That’s the best way. The joy of being in an industry like this. We’re all trying to figure out what drives our members and makes them enthusiastic about our programs. And so I think there has to be a balance between this openness to try and be okay with getting it wrong and also making sure that when we place a bet on something, it’s worth it to the customer and to the member.
Robbie Baxter: I want to wrap up with a question about advice for the audience in terms of what you’ve learned in your time working on Walmart+ and your foray into kind of deep into subscription work. What advice do you have for people wherever they are on the subscription journey?
There are lots of people who are launching right now, some that are in scale mode, trying to figure out how to broaden this across my audience and take what’s been done with paperclips, chewing gum, and used rebar and concrete. And then there are the ones that are trying to stay relevant as the world changes around them. What would your three tips be?
Venessa Yates: I would start with just thank you for participating. I know it’s not advice, it’s just heartfelt gratitude. What we do is difficult, and it takes real courage to try and understand the hearts and minds of people we don’t know genuinely.
And so, thank you for challenging the industry. And thank you for challenging us to be who we are and what we do. I mean it when I say I’m inspired by everyone in the room, whatever stage of the journey you’re in.
Joining a year ago, I would say that it was immensely difficult coming in from a traditional background with processes and procedures and moving into an innovative, fast-changing direction of the business. It’s been incredible.
Two things I will leave you with is a book by Anese Cavanaugh called Contagious Culture: Show Up, Set the Tone, and Intentionally Create an Organization that Thrives. My team and I have spent a lot of time thinking about the role of culture in our team. We’re a four-year-old team in a 60-year-old organization. That means things look a little bit different. But what looks the same across our organization is the enthusiasm, excitement, energy, and infectious nature of what we do that permeates the team and the support teams around us. So really getting excited about what we do and understanding our role as leaders, but also as cheerleaders for each other. And fostering this kind of notion of complementarity, we’re at our best when we allow ourselves to be the best at what we are and in our individual rights.
The second piece of advice I would say is to be a member. Not only of your own program but of your competing programs as well and truly experience it as a member. Not as Venessa who leads a membership program or Robbie who writes on membership programs, but truly involve yourself in those programs. Seek out the points of friction, seek out the points of delight, and understand what it is that folks do well and not do well.
I’ve lived in the retail world my entire life, and there’s nothing better than wandering off in the store while my husband does the shopping, and I’m looking at all of the things that people are bringing to bear. When you immerse yourself as a member of your own program and those around you, you truly understand where to go and where to focus.
So those would be the two things that I would leave you with.
Robbie Baxter: I love that. Yeah, sign up for some memberships. The average American is spending about $279 a month on memberships, and I’m probably double that, but it’s a great way to learn, stay humble, and keep growing.
Venessa, thank you so much. It’s been a pleasure, and I wish you all the best with Walmart+.
Venessa Yates: Thank you, Robbie.
