Walmart Labs launches Goodies, a Birchbox-like service for food
Ki Mae Heussner Nov 14, 2012 (Jun 9, 2020) -- Blog Post
Big box stores aren't known for curating artisanal and ethnic foods — if anything, they're usually associated with the opposite.
But Walmart (s WMT) is trying its hand at "discovery commerce" with a Birchbox-style subscription service for gourmet food. Called Goodies, the service launches Wednesday after a three-month-long beta test including 3,000 users in the U.S.
"The whole idea is around discovery," said Ravi Raj, vice president of products at Walmart Labs. "We want to introduce you to new types of food that you haven't heard of before, not things you'd find at most mainstream stores."
Goodies is the latest service from WalmartLabs, the retail giant's innovation arm that was created last year with the acquisition of social media startup Kosmix. In the past year, Walmart Labs has also launched Shopycat, a gift-giving Facebook app, and Polaris, the search engine powering Walmart.com.
With Goodies, subscribers pay $7 a month, including tax and shipping, to get a box of gourmet, organic and artisanal food valued at about $15. The boxed items are sample-sized but users can purchase full-sized products at goodies.co.
The service, which clearly follows Birchbox's model, is not the first to bring discovery commerce to food. Love With Food, which is backed by 500 startups, and Tasterie offer similar services. Lollihop provided a subscription service for healthy snacks, until it shut down earlier this year.
But Raj said Walmart aims to differentiate itself (and avoid the deadpool) by undercutting rivals with a cheaper price (most other products are about twice as expensive), offering a unique selection of items curated by in-house foodies and rewarding subscribers with a social loyalty program. For each review they write about the products, members earn points, which they'll ultimately be able to redeem for a free box. During the beta period, members weren't able to redeem their points, but half still submitted reviews for products, Raj said.
It's a smart move for Walmart – they can get cheaper prices from food suppliers eager for a chance to distribute more widely in Walmart stores and then see which items might have mass appeal. (A formal arrangement isn't in place yet, but Raj said items that resonate well have a good shot at ending up on store shelves.) And it could get the company in front of a different set of customers. Initially, Raj said they thought Goodies might appeal to younger, more urban customers, but they've found that it attracts a broad swath of consumers, from millennials to seniors.
But, going forward, it will be interesting to see how consumers respond to the new service. From the box that made its way to us, it looks like Goodies selections are certainly more interesting than the fare I'd expect to find at my local Walmart. But, while some items looked like they were from off the beaten path, others – like Smartfood Selects chips and a Nutella snack pack – would be hard to classify as "artisanal."
For now, Raj said, the company is focused on food, which is Walmart's largest category and naturally inspires social commentary. But he acknowledged that with a name like "Goodies" the door is open for expansion into other categories.
"Given time… there's a chance we might be looking at other verticals," he said.