When we think about loyalty programs, we often picture airline miles or coffee shop punch cards. But Walmart has taken a different approach, crafting a multi-layered retail ecosystem that combines a paid loyalty program (Walmart+), a free rewards currency (Walmart Cash), and strategic partnerships that deliver real value to shoppers.

For business owners looking to understand how loyalty marketing can drive customer lifetime value (CLV) and reduce churn, Walmart’s strategy offers invaluable lessons. Our Platform Happyrewards.io makes these principles even more accessible, providing a digital loyalty solution that helps businesses of all sizes create customized rewards programs to boost retention and growth—just like the sophisticated ecosystem Walmart has built.

In this comprehensive guide, we’ll unpack how Walmart’s loyalty program works, explore the customer engagement strategies that make it successful, and extract actionable lessons that business owners can apply to their own retention strategy.

Whether you’re running a small retail shop or managing a growing e-commerce business, understanding Walmart’s approach to customer retention will help you build stronger, more profitable customer relationships.

Understanding Walmart’s Multi-Tiered Loyalty Ecosystem

Before diving into the mechanics of how Walmart builds customer loyalty, let’s break down the different components of their loyalty marketing strategy. Unlike many retailers who rely on a single program, Walmart has created a comprehensive retail ecosystem that caters to different customer needs and shopping behaviors.

Walmart+

Walmart+ represents the company’s paid loyalty program—a membership subscription that costs $98 annually or $12.95 monthly. This subscription model positions Walmart as a direct competitor to Amazon Prime, offering a bundle of benefits designed to create emotional loyalty through convenience and savings.

The program includes:

• Free shipping with no minimum on orders
• Same-day delivery for groceries on orders over $35
• Member prices on fuel (saving up to 10 cents per gallon)
• A Paramount+ Essential subscription
• Early access deals including Black Friday early access
• Newer perks like Burger King savings and Pluto TV ad-free viewing

Walmart Cash

Walmart Cash operates as the company’s free rewards currency available to anyone with a Walmart.com account. Powered by the Ibotta Performance Network, this program offers item-specific rewards through manufacturer rebates on hundreds of products.

Customers simply:

• Clip digital coupons in the Walmart app
• Purchase qualifying items
• Watch their cashback rewards accumulate

This reward redemption system is incredibly straightforward—no receipt scanning required—and rewards are deposited as a Walmart eGift card balance that customers can use on future purchases or cash out at a MoneyCenter.

OnePay CashRewards Card

The OnePay CashRewards Card adds another dimension to Walmart’s loyalty strategy. Walmart+ members earn:

• 5% cash back on Walmart purchases (both in-store and online)
• 1.5% on all other purchases

This creates a powerful incentive program that reinforces repeat purchase behavior.

How These Programs Work Together?

What makes this omnichannel loyalty approach particularly effective is how these programs work together. A customer might:

• Use Walmart Cash for item-specific rewards
• Enjoy Walmart+ benefits like free shipping and grocery delivery
• Maximize their savings with the OnePay CashRewards Card

—all while shopping through the Walmart app with features like Mobile Scan & Go and Walmart Pay for contactless checkout.

This multi-layered strategy creates multiple touchpoints for customer engagement, increases frequency of purchase, and drives up average order value (AOV). It’s a masterclass in value proposition design, offering both transactional loyalty rewards and experiential benefits that build brand affinity.

For business owners, the key lesson here is that effective loyalty programs don’t have to be one-size-fits-all—creating different tiers and options allows you to meet diverse customer needs while maximizing customer lifetime value.

How Walmart+ Creates Exceptional Customer Value and Drives Retention?

The heart of Walmart’s customer retention strategy lies in Walmart+, a membership program that has grown exponentially since its 2020 launch. Understanding why this paid loyalty program succeeds provides critical insights into building brand loyalty in the modern retail landscape.

Core Value Proposition

The core value proposition of Walmart+ centers on solving real customer pain points:

• Free shipping with no minimum removes friction from online shopping
• Same-day delivery for grocery orders over $35 competes directly with Amazon Fresh and Instacart
• The fuel discounts benefit—offering member prices on fuel at thousands of locations—addresses everyday cost concerns, especially important given that fuel is a recurring expense for most households

Beyond Transactional Benefits

But Walmart has gone beyond basic transactional loyalty benefits. The inclusion of Paramount+ Essential (valued at $59.88 annually on its own) transforms the membership into an entertainment bundle.

Partnerships include:

• Burger King savings (25% off digital orders daily)
• Walmart+ Travel (powered by an Expedia partnership offering 2% cash back on airfare and 5% on other travel purchases)

These expand the VIP benefits into lifestyle categories, creating emotional loyalty that extends beyond retail transactions.

Key Data and Insights

The data validates this approach:

• As of 2024, this program has attracted 31.8 million subscribers
• Members demonstrate increased loyalty by spending 35% more than non-members
• Research from Brick Meets Click reveals that around two-thirds of households ordering groceries online from Walmart last month were Walmart+ members
• These members spend more on online orders than non-members by over 40%

Customer Experience Enhancements

The Mobile Scan & Go feature exemplifies how Walmart+ creates customer experience (CX) improvements. Members can:

• Scan items with their phone while shopping
• Skip checkout lines
• Use Walmart Pay for seamless checkout

This micro-moment optimization reduces friction and saves time—a key driver of customer satisfaction in retail.

InHome delivery takes convenience even further, allowing Walmart+ members to have groceries delivered directly into their refrigerators when they’re not home. While this service requires additional fees in some markets, it represents the kind of experiential rewards that build brand trust and differentiate Walmart from competitors.

Additional benefits include:

• Pharmacy delivery benefit, which addresses health and wellness needs
• Auto Care benefits including free flat tire repair and road hazard warranty on tire purchases

These add unexpected value that creates surprise and delight moments—a proven strategy for building emotional loyalty.

Exclusivity and Early Access

Perhaps most strategically, Walmart+ offers early access to deals throughout the year, including Black Friday early access. This tier progression benefit makes members feel like VIP benefits recipients, tapping into the psychological principle of exclusivity.

Research shows that:

• Early access to sales (60.1%)
• Early access to new products (50.8%)

rank among the most important loyalty program benefits for customers.

Onboarding Strategies

From a customer journey perspective, Walmart+ excels at onboarding. The company offers:

• Free trials
• Discounted memberships for government assistance recipients (mirroring Amazon’s approach)
• Partnerships with American Express Platinum cardholders who receive complimentary memberships

These strategies lower the barrier to entry while allowing customers to experience the value firsthand.

Lessons for Business Owners

For business owners, the lessons are clear: successful membership programs must deliver tangible, recurring value that justifies the subscription cost. Combining convenience benefits (free shipping, same-day delivery) with lifestyle perks (streaming services, dining discounts) creates a compelling value exchange that keeps customers engaged.

The key metric to watch isn’t just membership growth, but customer lifetime value (CLV)—and the customer lifetime value of Walmart+ members is “appreciably higher” than other consumers because they spend and shop more frequently.

Walmart Cash: Democratizing Rewards and Capturing First-Party Data

While Walmart+ serves as the premium tier of Walmart’s loyalty ecosystem, Walmart Cash represents the company’s strategy to engage every customer regardless of whether they pay for a membership. This free cashback rewards program demonstrates how retailers can build customer engagement while simultaneously capturing valuable first-party data for personalized offers.

How Walmart Cash Works

Walmart Cash operates through manufacturer rebates sourced via the Ibotta Performance Network. The mechanics are brilliantly simple:

• Customers browse products on Walmart.com or in the Walmart app
• Clip digital coupons for item-specific rewards
• Purchase those products (either online or in-store)
• Automatically receive cashback rewards deposited into their Walmart eGift card balance

No receipt scanning, no separate app downloads, no complicated point system—just straightforward reward points that translate directly to dollars.

Key Advantages of the Program

The beauty of this incentive program lies in its accessibility and immediacy. Unlike traditional tiered loyalty programs that require accumulating points over months to reach meaningful rewards, Walmart Cash offers instant gratification.

Rewards range from $0.50 to $30 on individual items, with many offers redeemable multiple times on the same product. This structure encourages repeat purchase behavior while making customers feel rewarded with every shopping trip.

Friction-Free Reward Redemption

The reward redemption process is equally friction-free. Customers can:

• Apply their Walmart Cash balance at checkout (online or in-store via Walmart Pay and contactless checkout)
• Cash out their balance for actual U.S. dollars at any Walmart MoneyCenter once they reach $25

This flexibility addresses a common complaint about loyalty programs: point expiration and limited redemption options.

Data-Driven Marketing Benefits

From a data-driven marketing perspective, Walmart Cash serves multiple strategic purposes:

• Every clipped offer provides Walmart with insight into customer preferences and shopping intentions
• This zero-party data (information customers voluntarily share) is far more valuable than third-party cookies for building personalized offers and enabling hyper-personalization
• The program feeds directly into Walmart Connect, the company’s retail media network, allowing suppliers to promote products through sponsored ads that include item-specific rewards

This integration represents a brilliant partner ecosystem strategy:

• Manufacturers pay to participate in the Ibotta Performance Network, funding the cashback rewards while gaining targeted exposure to likely buyers
• Walmart captures behavioral triggers and purchase data that enhance their CRM integration and marketing automation capabilities
• Customers receive tangible savings

It’s a win-win-win value exchange that demonstrates sophisticated customer centricity.

Strategic Shift to Broader Access

The expansion of Walmart Cash beyond just Walmart+ members marks a strategic shift. Initially exclusive to paying subscribers, Walmart recognized that democratizing access would:

• Drive broader customer engagement and data collection
• Create a pathway for tier progression—free members who experience value through Walmart Cash may eventually convert to paid Walmart+ subscribers

Effectiveness and Consumer Impact

Digital coupons have proven remarkably effective at driving customer retention. Research indicates that 58% of consumers spend more with brands that offer loyalty programs, and the ease of Walmart Cash removes traditional barriers to program participation. There’s no physical loyalty cards to carry, no digital stamps to collect—just seamless integration into the existing shopping experience.

Lessons for Business Owners

For business owners, Walmart Cash offers several transferable lessons:

• First, reducing friction in reward redemption dramatically improves redemption rate and program satisfaction
• Second, connecting rewards to actual purchase behavior (rather than arbitrary point accumulation) creates stronger behavioral triggers for repeat purchase
• Third, item-specific rewards allow for targeted promotion of new products, clearance items, or high-margin goods—turning the loyalty program into a merchandising tool, not just a cost center

The Walmart app serves as the central hub for this ecosystem, demonstrating the importance of a robust loyalty app that integrates mobile coupons, push notifications, payment options, and member portal functionality. This omnichannel loyalty approach ensures customers can engage with Walmart Cash whether they’re planning online, shopping in-store, or using grocery delivery and pickup services. For more on embracing this trend, check out The Rise of Mobile-First Loyalty Programs

Strategic Partnerships and Ecosystem Expansion: Building Brand Affinity Beyond Retail

One of the most sophisticated aspects of Walmart’s loyalty marketing strategy is how the company has built a partner ecosystem that extends brand equity beyond traditional retail boundaries.

This approach transforms Walmart+ from a simple membership program into a lifestyle subscription that touches multiple aspects of customers’ daily lives—a strategy that drives emotional loyalty and reduces churn.

Key Partnership Benefits

• Paramount+ Essential By bundling a streaming service valued at $59.88 annually, Walmart creates perceived value that nearly covers the $98 annual membership subscription cost on its own. This addresses a fundamental challenge in paid loyalty programs: demonstrating clear value proposition that justifies the upfront fee. Research shows it’s 5-25x more expensive to acquire a new customer than to keep an existing one, making the economics of subsidizing streaming content attractive if it improves customer retention.

• Burger King Savings (launched in 2024) Walmart’s first dining benefit, offering Walmart+ members 25% off digital orders daily plus a free Whopper every three months. This partnership targets a specific behavioral pattern: most Americans eat from quick service restaurants several times a week. By addressing both grocery needs and dining occasions, Walmart increases the frequency of purchase touchpoints and wallet share.

• Walmart+ Travel (powered by Expedia partnership) Members earn 2% Walmart Cash on airfare and 5% on other travel purchases—creating a compelling incentive program for a high-value spend category. This benefit also generates valuable first-party data about customer travel preferences, enabling future personalized offers and behavioral triggers for travel-related promotions.

• Pawp Pet Care Integration offers virtual veterinary consultations, tapping into the pet owner segment—a demographic known for high spending and brand loyalty. This benefit addresses real pain points (expensive vet visits, convenience) while building emotional loyalty through care for beloved pets. It’s an example of non-monetary incentives that create brand affinity beyond simple transactional loyalty.

• Pluto TV Ad-Free Viewing Adds another entertainment dimension.

• Credit Card and Carrier Partnerships

  • American Express Platinum cardholders receive complimentary Walmart+ memberships
  • Verizon customers can access discounted monthly rates
  • Certain credit card holders receive free memberships

  Each partnership expands Walmart’s reach while subsidizing customer acquisition costs.

Walmart Connect Retail Media Network

The Walmart Connect retail media network represents perhaps the most strategically important ecosystem element.

By allowing suppliers to promote products through sponsored ads that integrate with Walmart Cash offers, Walmart has created a high-margin advertising business that grew by 15% in Q3 2024, with these fees and ad revenues making up over half of the operating income boost that quarter. This direct-to-consumer (D2C) advertising capability provides scalable rewards funding while building deeper supplier relationships.

Customer Spark Community

Extends this ecosystem into market research, compensating customers for feedback and product testing. This user-generated content and feedback loop improves product selection while making members feel valued beyond their purchases—a key driver of brand advocacy.

Lessons for Business Owners

Walmart’s partnership strategy offers critical lessons in value proposition design:

• Rather than funding all loyalty program benefits internally, strategic partnerships allow companies to offer outsized value while sharing costs with aligned partners
• The key is ensuring partnerships feel cohesive and relevant to your target audience—Walmart’s partners all address needs of busy families seeking convenience and value

The ecosystem approach also demonstrates sophisticated customer segmentation. Different members utilize different benefits based on their needs:

• Parents might prioritize grocery delivery and Paramount+
• Commuters value fuel discounts
• Travelers appreciate the Expedia partnership
• Pet owners use Pawp

This variety increases the likelihood that each member finds personal value, improving Net Promoter Score (NPS) and reducing churn.

Competitive Advantage Through Switching Costs

From a competitive advantage perspective, this retail ecosystem creates switching costs that extend beyond retail.

A customer who watches shows on Paramount+ through their Walmart+ membership, has family travel booked through Walmart+ Travel, and regularly uses Burger King savings faces significant inconvenience in switching to a competitor—even if that competitor offers slightly lower prices on groceries.

Measuring Success: How Walmart’s Loyalty Programs Drive Measurable Business Results

Understanding the mechanics of Walmart’s loyalty programs is important, but the real value for business owners lies in examining the measurable impact these programs have on customer retention, customer lifetime value (CLV), and overall profitability. The data reveals how sophisticated loyalty marketing translates into bottom-line results.

Walmart+ Growth and Membership Penetration

Walmart+ has demonstrated remarkable growth trajectory.

• Market researcher Consumer Intelligence Research Partners estimates the program had about 25 million members as of the end of January, with other estimates suggesting the number has grown to over 31 million subscribers
• Membership penetration continues increasing—43% of Walmart.com shoppers reported having a Walmart+ membership, up from just 23% three years earlier

Spending Patterns and Engagement Impact

The spending patterns of Walmart+ members validate the program’s effectiveness at driving customer engagement and average order value (AOV):

• Beyond spending three times more than non-members overall
• Walmart+ members drove around two-thirds of online food sales for the company in April 2025

This concentration demonstrates how paid loyalty programs can shift wallet share toward the retailer even in competitive categories like groceries.

Repeat Purchase and Retention Metrics

Repeat purchase frequency shows equally impressive results:

• Walmart+ members are nearly 10% more likely to “express intent” to reuse e-commerce services compared to Walmart customers who aren’t members
• This improved retention rate compounds over time—research consistently shows that a 5% increase in customer retention correlates with a 25% increase in profit

Financial Impact of Membership Fees

The financial impact of membership fees alone is substantial:

• Walmart’s membership fee revenue reached 3.1 billion US dollars in fiscal year 2024
• Up from 2.6 billion in 2023 and 2.2 billion in 2022

This revenue stream has high margins since many costs (technology infrastructure, supplier partnerships) have already been incurred, making membership growth particularly profitable.

Churn Reduction and Consumer Behavior

More strategically, Walmart+ serves as a churn reduction tool in an increasingly competitive retail environment. As Amazon and other competitors vie for the same customers, the subscription model creates brand trust and habitual shopping patterns.

• Over 83% of consumers say belonging to a loyalty program influences their decision to buy again from a brand
• 84% of consumers say they’re more likely to stick with a brand that offers a loyalty program

Walmart Cash Contribution to Retention

Walmart Cash contributes to customer retention metrics even for non-paying customers. The program’s accessibility—anyone with a Walmart.com account can participate—ensures broad customer engagement while providing first-party data that improves predictive analytics and hyper-personalization capabilities. This data enables more effective marketing automation, push notifications, and personalized offers that drive repeat purchase behavior.

Role of the Walmart App in Measurement

The Walmart app serves as a critical measurement and engagement tool. With hundreds of millions of downloads, it provides:

• Real-time tracking of customer journey touchpoints
• Redemption rates
• Behavioral triggers

This cloud-based loyalty infrastructure enables sophisticated RFM analysis (Recency, Frequency, Monetary value) and customer segmentation that inform everything from inventory decisions to promotional strategies.

Net Promoter Score (NPS) and Industry Benchmarks

Net Promoter Score (NPS) improvements indicate growing brand advocacy. While Walmart hasn’t publicly disclosed specific NPS metrics for Walmart+ members versus non-members, the program’s rapid growth and renewal rates suggest strong customer satisfaction.

Industry research shows that the top-performing loyalty programs boost revenue from customers who use them by 15-25% annually, positioning Walmart’s program among retail leaders.

Omnichannel Engagement Benefits

The impact on omnichannel loyalty is particularly noteworthy. Walmart+ members engage across multiple channels—in-store, online, pickup, and delivery—at higher rates than non-members. This multi-channel engagement creates stronger relationships and provides more touchpoints for cross-selling and up-selling opportunities that increase lifetime value.

Walmart’s approach demonstrates that successful loyalty programs aren’t cost centers—they’re growth engines when designed to genuinely improve customer experience (CX), deliver measurable value, and leverage data-driven marketing for continuous optimization.

Lessons for Business Owners: Applying Walmart’s Loyalty Strategies to Your Business

Walmart operates at massive scale, but the loyalty marketing principles underlying their success are remarkably applicable to businesses of all sizes. Let’s distill the key lessons business owners can implement to improve customer retention, increase customer lifetime value (CLV), and build sustainable brand loyalty.

Create Genuine Value, Not Just Discounts

The most important lesson from Walmart’s approach is that effective loyalty programs deliver real value that extends beyond simple discount codes. Walmart+ succeeds because it solves actual customer problems: shipping costs, delivery convenience, fuel expenses, entertainment needs.

Before launching any incentive program, ask:

• “What friction points or unmet needs do our customers face?”

Your value proposition should address these directly, whether through free shipping, early access to products, exclusive content, or convenience features that save time.

Layer Transactional and Emotional Loyalty

Walmart combines transactional loyalty (cashback rewards, fuel discounts, manufacturer rebates) with emotional loyalty (streaming entertainment, dining perks, community features).

Research shows that companies with strong emotional connections to customers outperform competitors’ sales growth by 85%.

Consider how your loyalty program can create emotional bonds beyond purchase rewards—perhaps through brand community features, shared values initiatives, or experiential rewards like exclusive events.

Reduce Friction at Every Touchpoint

The seamless nature of Walmart Cash (clip offer, purchase, automatic reward) and Mobile Scan & Go (scan while shopping, skip checkout) demonstrates how removing friction drives customer engagement.

Examine your customer journey for pain points:

• Is enrollment complicated?
• Is reward redemption confusing?
• Do customers need separate apps or cards?

Every additional step reduces participation. The best loyalty apps integrate naturally into existing shopping behaviors rather than requiring separate workflows.

Leverage First-Party Data for Personalization

Walmart‘s ecosystem captures rich first-party data and zero-party data that enables hyper-personalization.

Even small businesses can implement this principle through CRM integration that tracks purchase history, preferences, and behaviors. Use this data to deliver personalized offers, birthday rewards, and recommendations that feel relevant rather than generic.

Research shows 68% of customers in loyalty programs feel brands better understand their buying preferences, leading to improved satisfaction.

Build Strategic Partnerships to Expand Value

You don’t need to fund all benefits internally. Walmart‘s partnerships with Paramount+, Burger King, Expedia, and others allow them to offer outsized value while sharing costs.

Consider what partner ecosystems make sense for your business:

• A local bookstore might partner with a coffee shop for discounts
• A fitness brand might partner with healthy meal delivery services

Coalition loyalty strategies expand value proposition while reaching new target audiences. Automate Where Possible

To scale these benefits efficiently, consider automating rewards, triggers, and communications—much like how Walmart integrates its app and data systems. Learn more in The Benefits of Automating Your Loyalty Program with Software or Top 10 Features Every Loyalty Software Must Have.

Implement Tiered Options for Different Segments

Walmart‘s dual approach (free Walmart Cash and paid Walmart+) acknowledges that customers have different needs and willingness to pay. This tiered loyalty structure maximizes participation while creating tier progression paths.

Consider offering both free and premium tiers, or VIP benefits for top spenders.

Research indicates:

• 37% of consumers will spend more money with brands with which they have a retail subscription
• 28% of consumers belonging to membership programs
• 27% of loyalty program members

Measure What Matters and Optimize Continuously

Walmart tracks detailed metrics on member spending, frequency of purchase, redemption rates, and program ROI.

Implement similar tracking for your program through:

• RFM analysis (Recency, Frequency, Monetary value)
• customer segmentation
• Net Promoter Score (NPS) measurement

Use these insights to identify which benefits drive the most customer engagement and which fall flat. The most successful programs evolve based on data, not assumptions.

Make Mobile Your Priority

With smartphone usage dominating, your loyalty app or mobile web experience must be excellent.

Invest in:

• mobile coupons
• push notifications
• seamless checkout features that work flawlessly on phones

Consider whether customers can easily check balances, redeem rewards, and access benefits from their mobile devices. Poor mobile experience is a primary driver of loyalty program abandonment.

Communicate Benefits Clearly and Repeatedly

Even great loyalty programs fail if customers don’t understand or remember the benefits. Walmart constantly reinforces Walmart+ value through push notifications, email, in-app messaging, and even in-store signage.

Create a communication calendar that regularly:

• Reminds members of available benefits
• Highlights milestone rewards they’re approaching
• Showcases exclusive offers they might miss otherwise

Focus on Retention Economics, Not Just Acquisition

The most powerful lesson from Walmart‘s success is the fundamental economics of customer retention. Acquiring a new customer costs 5 to 25 times more than retaining an existing customer, with customer acquisition costs increasing nearly 60% in the last five years.

Yet many businesses still allocate the majority of marketing budgets to acquisition. Shift resources toward retention strategy—the ROI is significantly higher.

Don’t Compete on Price Alone

Walmart‘s EDLP (everyday low prices) strategy is famous, but their loyalty programs succeed because they add value beyond price.

For small businesses that can’t match big-box pricing, loyalty programs offer a crucial competitive advantage by building relationships and delivering benefits competitors don’t offer. Brand advocacy from loyal customers often matters more than having the lowest price.

Conclusion

Walmart’s loyalty program success didn’t happen by accident—it’s the result of strategic thinking about customer retention, genuine value proposition design, seamless technology implementation, and continuous optimization based on data-driven marketing insights.

The company has transformed from a retailer known primarily for everyday low prices (EDLP) into one offering a comprehensive retail ecosystem that builds brand loyalty through convenience, value, and meaningful benefits.

For business owners, the lessons from Walmart’s approach are clear: successful loyalty marketing requires genuine value delivery, friction reduction, omnichannel integration, strategic partnerships, and continuous optimization.

By learning from Walmart’s sophisticated approach to loyalty marketing—and leveraging our user-friendly tool Happyrewards.io to implement digital rewards cards, automated engagement, and personalized incentives—you can build stronger customer relationships, improve retention rates, increase average order value, and create the kind of brand loyalty that drives sustainable growth in an increasingly competitive marketplace.

The tools and technologies that power Walmart’s success are increasingly accessible to businesses of all sizes—what matters most is the commitment to genuinely serving customers and delivering value at every touchpoint of their customer journey.