eCommerce News of the Week – May 16th 2016

Welcome to eCommerce News of the Week (NOTW)!  As you can see the frequency of the news hasn’t been weekly, but I’m committed to doing these posts as much as possible because the feedback that I’ve received has all be very positive.  Thank you all.

Let’s get into it!

Walmart Tests 2 Day Shipping

On Thursday, Walmart started testing a two-day unlimited shipping service priced at $49.00 a year.  Subscribers will get access to more than a million skus within the program, including the most commonly purchased items on Walmart.com.  Walmart is poised to take on Amazon directly with this move and they hope that they can leverage their physical retail locations for fulfillment, and customer satisfaction, because they can ship it sooner (and it more ways).  Ultimately, they are trying to cut the lead time down for the actual shipment process.  If an item is in stock at a store within 40-50 miles of a customer, chances are they will get the item in 1 day.

Walmart tried to do a 3 day shipping program last year, and it failed, but that was in part because Amazon has already trained the customer to expect 2 day shipping instead of 3.   I’m curious to know if people will opt-in to the new service to buy products that they are already getting at Amazon (and are used to the UX).

Personally, I think Walmart is winning the “ship to store” game, but Amazon still owns a majority of the B2C “popular item” web sales.  I don’t see a huge differentiator (other than price — which may be enough for some) that would make consumers switch from Amazon to Walmart’s services; keep in mind that you get more than just 2 day shipping for Amazon prime’s membership.

Time will tell if Walmart can continue to improve their customer experience and eat some of Amazon’s customer base.

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Amazon is getting in the Grocery Game

Amazon is continuing its mission on white-labeling the most popular items on the platform, to gain margin and continue bottom line growth for investors.  Amazon will roll out its own white labeled brands of common household items like diapers, coffee, baby food, tea, spices, and other perishable goods.  These products will live under brand names like “Happy Belly”, “Wickedly Prime”, and “Mama Bear”.  How cute, right?   The big play for Amazon is utilizing it’s marketing and infrastructure dominance to change consumers minds and shift them to their Amazon brands.

Can you imagine buying “Happy Belly” diapers instead of Pampers?  No, I can’t.  The allure and name notoriety just isn’t there yet.  This is obviously a long term play for Amazon, and they seem to be ok with that.  I would expect to start seeing some heavy Amazon marketing, both digital and traditional, in the next quarter or two to get the ball rolling.

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Toy “R” Us hires CIO to push eCommerce

Toys “R” Us has named Phil Newmoyer as its new CIO (Chief Information Officer), filling a critical position for the toy retailer struggling to compete with Amazon.com and other smaller, boutique, eCommerce retailers.  Currently Toy R Us, Baby R Us, and FAO Schwartz are implementing Oracle ATG, one of the largest, and complex eCommerce infrastructures out there in hopes that they can mimic the features and scalability that other stores already have.  Toy R Us will push hard to continue to grow their pick up in store option (which is lacking) and add new features like curb-side pickup.

It seems to me that Toy R Us are following the “trends” instead of leading the pack.  For a company that lost $1.3 billion over the last two years, and closed down iconic FAO Schwartz location in NYC, they need to innovate at a faster pace than the market already is to gain business back.   My best wishes to Mr. Newmoyer, in hopes that he can turn things around!

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Short and sweet this week in eCommerce, but hopefully you learned something.

Until next time,

Mike

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