business news in context, analysis with attitude

Walmart announced this week that its mobile app now includes "a new subscription service that empowers customers to effortlessly subscribe to thousands of everyday essentials at Walmart’s Every Day Low Prices. From pet food and supplements to diapers and paper towels, Walmart subscriptions guarantee automatic scheduled delivery on a customer's preferred cadence, whether it's every two weeks or every two months."

KC's View:

I've been saying this since 2007, when Amazon launched its Subscribe & Save service - automatic replenishment is one of the most powerful marketing and loyalty tools of which retailers can avail themselves.

Walmart clearly has decided to get into the Subscribe & Save business, which leads me to ask:  What took it so long?

Better questionWhat is taking you so long?

Automatic replenishment enables retailers to build consistent and predictable sales into their business plans.  It takes subscribers out of the market for those items for the foreseeable future;  I have 40+ Subscribe & Save items, and I never have to go to the store to buy any of those products.  Not only am I loyal to Amazon for those items, but I'm also loyal to the brands I am buying - which is one of the reasons that retailers can get manufacturers to underwrite discounts on some SKUs.  It becomes this great flywheel of sales and profits, in which one or two subscriptions can blossom into many more (in my case, more than 40).

I've argued since 2007 that not only is automatic replenishment an enormous and tangible competitive advantage, but not having it is a definite disadvantage.  

I point out that I've been saying this since 2007 because I need to offer full disclosure on something else - my friend Tom Furphy, with whom I do The Innovation Conversation here on MNB, is the CEO of Replenium, which I always describe as Subscribe & Save for everyone else.  Tom ran the team at Amazon that conceived and implemented Subscribe & Save, and he knows more about this stuff than pretty much anyone else - but he didn't start Replenium until 2013.  I only mention this because I don't want you to think that I'm only an automatic replenishment enthusiast because of my relationship with Tom.  In fact, I'm an automatic replenishment enthusiast because it is a great freakin' idea and I am the poster boy for how it can influence consumer behavior.