As they continue their quest to dominate the U.S. consumer’s whole paycheck, Amazon and Walmart took different roads this week. Both focused on their obsession with the all-important “last mile” of the eCommerce experience. Walmart made the more direct claim on the whole paycheck this week, however, putting some media muscle behind its new subscription program.
The story of how Amazon changed its last-mile strategy, as it recently started using Whole Foods stores as fulfillment centers, actually starts in Minneapolis with Target. Back when he was taking a victory lap to celebrate Target’s stellar eCommerce performance on its Q2 earnings call, CEO Brian Cornell made a telling statement: “Store-based fulfillment is uniquely suited to our business model because of the way it fits within our overall strategy. In particular, it aligns with our merchandising approach, which is based on curation both in our stores and online assortments. As a result, the majority of our digital demand is driven by items that are already available in our stores, which positions us to efficiently rely on those locations to fulfill the demand.”
Someone at Amazon was listening, and took heed. Over the past week, Amazon took the “store as fulfillment center” strategy to a new level. It has experimented with using Whole Foods stores as warehouses as early in the pandemic as mid-April. Last week, it turned its Brooklyn store “dark” to customers and open to warehouse workers. The move is proof-positive that Amazon will continue to be flexible and innovative when it comes to the last mile. It has always been that way when it comes to eCommerce delivery, but the online grocery competition – which will also include the Walmart+ subscription program set to debut on Tuesday, Sept. 15 – has forced it to be even more immediate with delivery.
“Every chain in the world will be doing this in the future. And the future is now, because COVID-19 has pushed the timeline up for a number of these kinds of initiatives,” said Ken Morris, managing partner at Cambridge Retail Advisors, in a Fast Company report.
It could also be the driver of the widely reported talks between Amazon and Simon Properties. Rumors put Simon and Amazon together to make a play for JCPenney. That joint venture talk was squashed this week when Simon and Brookfield Properties finalized their bid for the department store, with a commitment to keep the JCPenney “banner flying.”
However, it didn’t say how many banners would fly. It’s possible that Amazon could still make a deal with Simon and Brookfield for selected JCP locations, especially in the top 50 metros where online grocery is hotly contested.
Up, Up and Away
The last mile also figured heavily in new developments in the area of drone delivery. Walmart made an official announcement that a drone test program was set to start on Sept 10. in Fayetteville, North Carolina with the aid of Flytrex, which delivers goods with drones. The deliveries will carry “select grocery and household essential items from Walmart stores using Flytrex’s automated drones,” a press release said.
The company said the drones will help it to “gain valuable insight into the customer and associate experience, from picking and packing to takeoff and delivery.” Walmart acknowledged that “it will be some time before we see millions of packages delivered via drone. That still feels like a bit of science fiction.”
Nonetheless, the release said, “we’re at a point where we’re learning more and more about the technology that is available and how we can use it.” The company added that pilot projects will provide the knowledge needed to “help shape the potential of drone delivery on a larger scale.”
Walmart+ Plays on the NFL
As pundits speculated on why Walmart was waiting so long to officially launch its Walmart+ subscription program, part of the answer showed up with Thursday’s NFL season-opening broadcast on NBC. It revealed a tightly coordinated integration with the league, as well as the debut of an ambitious national media campaign.
The integration came early in the broadcast with the “Walmart+ Cam,” which gives viewers an up-close view of the offensive huddle as well as aerial views of replays. The company also debuted a new 60-second spot for the Walmart+ service. The campaign, according to Walmart, features 22 families who “represent America,” featuring Asian American, Black, Latin and multi-racial families, as well as new and single parents, multigenerational households and those with disabilities.
“It captures a snapshot into their authentic, chaotic and beautiful lives, from everyday moments, like family dinners, to monumental ones, like the homecoming of a newborn baby,” said Walmart in a statement. “It shows how, despite our differences, Walmart+ enables us to do more of what matters most to all of us – spending time with loved ones.”
The campaign will cover several angles. Walmart says customer research has turned up insights into what consumers miss most from their pre-COVID days. That prompted the retailer to find something that would go beyond traditional and digital media to create new experiences for its customers, while also producing some potentially resonant social content.
Says Walmart: “So, as the final part of our Walmart+ campaign, we’re going to ‘plus up’ some of our customers’ most missed moments, making them bigger and better than before. The first ‘Plus Me Up’ experience, to be showcased within NBC Sports’ Sunday Night Football, surprises an essential healthcare worker and their family with the chance to be the only fans in the stadium during a select game this season.”