There’s a piece in Tech Crunch suggesting that Amazon’s ecosystem may be showing some cracks, and that Walmart has a unique opportunity at the moment to mount a competitive response that would take advantage of it.
The story argues that while Amazon has created and ecosystem of considerable breadth, it may actually not be so deeply rooted in the lives of its shoppers. “Amazon has invested in its Prime program continuously, adding feature after feature in an obvious bid to make the service appear as valuable as possible,” TechCrunch writes, but while everybody pays for them, many services actually are superfluous to people’s lives. It doesn’t matter, though, because people are hooked into Prime and can’t let go … even as the price of Prime rises and competing services may be as good or better.
“Streaming services and exclusive content have multiplied, and Prime users are frequently left out in the cold,” the story says. “Photo storage? Isn’t that free everywhere? Twitch Prime? Is that really useful for millions of working families? Prime Originals? Not exactly raking in the Emmys. But still… it’s Prime. It’s necessary.
“The only one who can realistically break this deadlock is Walmart. Not by providing the same thing as Amazon, but by providing something simpler and more focused, taking over the workhorse duties of Prime (shipping, sales, some basic media of opportunity) at a much lower price, granting the customer freedom to pursue their own choice in subscriptions while not meaningfully affecting their online retail experience.
“What would this Walmart offering consist of? They already offer free shipping on a lot of items, free store pickup, and so on. You don’t need to use your imagination here. What would make this better? Free 2-day shipping on all items with no minimum amount; grocery and secure package delivery; a set of basic TV and music streams or even just a partnership with a couple existing products; and lastly some in-store benefits like members-only promotions and perhaps even early access on Black Friday. (Plus extra perks at sub-chains like Sam’s Club.)”
TechCrunch argues that Walmart should price this at $50 a year - well below Amazon prime’s $129. “Timing-wise they’d want to announce this well ahead of the holidays — at least three months. First three months free if you sign up now and all that. It’ll be a big cash outlay but you don’t unseat a titan like Amazon on a shoestring budget. You do what it takes to put items in carts and go from there.
“Walmart won’t risk its business on this, but it makes sense to do it now and do it with vigor.”
You can read the entire argument here.
The story argues that while Amazon has created and ecosystem of considerable breadth, it may actually not be so deeply rooted in the lives of its shoppers. “Amazon has invested in its Prime program continuously, adding feature after feature in an obvious bid to make the service appear as valuable as possible,” TechCrunch writes, but while everybody pays for them, many services actually are superfluous to people’s lives. It doesn’t matter, though, because people are hooked into Prime and can’t let go … even as the price of Prime rises and competing services may be as good or better.
“Streaming services and exclusive content have multiplied, and Prime users are frequently left out in the cold,” the story says. “Photo storage? Isn’t that free everywhere? Twitch Prime? Is that really useful for millions of working families? Prime Originals? Not exactly raking in the Emmys. But still… it’s Prime. It’s necessary.
“The only one who can realistically break this deadlock is Walmart. Not by providing the same thing as Amazon, but by providing something simpler and more focused, taking over the workhorse duties of Prime (shipping, sales, some basic media of opportunity) at a much lower price, granting the customer freedom to pursue their own choice in subscriptions while not meaningfully affecting their online retail experience.
“What would this Walmart offering consist of? They already offer free shipping on a lot of items, free store pickup, and so on. You don’t need to use your imagination here. What would make this better? Free 2-day shipping on all items with no minimum amount; grocery and secure package delivery; a set of basic TV and music streams or even just a partnership with a couple existing products; and lastly some in-store benefits like members-only promotions and perhaps even early access on Black Friday. (Plus extra perks at sub-chains like Sam’s Club.)”
TechCrunch argues that Walmart should price this at $50 a year - well below Amazon prime’s $129. “Timing-wise they’d want to announce this well ahead of the holidays — at least three months. First three months free if you sign up now and all that. It’ll be a big cash outlay but you don’t unseat a titan like Amazon on a shoestring budget. You do what it takes to put items in carts and go from there.
“Walmart won’t risk its business on this, but it makes sense to do it now and do it with vigor.”
You can read the entire argument here.
- KC's View:
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I’m not sure I entirely agree with the premise that Amazon Prime is an over-priced, under-utilized entity with which Walmart can effectively compete simply by underpricing it. I think there is a lot more going on here … it is true that there are elements to Amazon’s ecosystem that people use less than others, but I also think that Amazon largely has been successful at integrating itself into our lives. I rarely buy anything online without checking on Amazon … I use Amazon’s video offerings frequently … and I talk to Amazon (via Alexa) frequently throughout the day.
Can Walmart compete with this? Sure. I’m not sure, though, that the best way to come at Amazon is to replicate many of its offerings at a lower price. But if it can meld together many of its various initiatives into a compelling and differentiated offering, that can work. For some people. Not everybody.
Ultimately, I think there is room for both Walmart and Amazon. But I also think that there is a lot of truth in the phrase, “Walmart won’t risk its business on this.” Risk is part of the game … that’s something that Amazon and Jeff Bezos understand in their DNA (perhaps because Bezos knows who said it).
