After years of dominating the ecommerce pond, Amazon Prime may have a new big fish to contend with: Walmart+.
Walmart+ is a new offering that Walmart is expected to roll out sometime this summer. While we don’t know everything about the newcomer just yet, there are a few things the market is expecting from Walmart+ that brands should know about.
Walmart+ is a paid membership that gives Walmart customers special perks and services. If that sounds familiar, it’s because Walmart+ will be directly competing with Amazon Prime, which has been fairly alone in this space since 2005. Walmart+ was expected to launch at the end of July 2020. Walmart has delayed the launch of the new subscription service and their website advises it is “coming soon”.
While Amazon is a massive player in the ecommerce space, George Hatch, Director of Marketplaces at Pattern, said Walmart is investing heavily in ecommerce and growing quickly, and brands should be paying attention to this Walmart+ move.
“Are they behind? Absolutely,” Hatch said, “but they have shown to be very serious about this race, and they have shown to be a little bit more formidable when it comes to brushing off the bruises and getting back up and trying again.”
One thing that makes Walmart+ so interesting, and which may shape the way brands sell their products on Walmart’s online marketplace, is that its subscription service costs less than Amazon Prime. According to Recode, a Walmart+ subscription will cost buyers $98 a year. Compare that to Prime, whose annual membership costs consumers $119 a year.
Similar to Amazon Prime Now, Walmart+ is expected to offer unlimited same-day delivery of groceries and merchandise from Walmart Supercenters. Its massive network of stores and distribution centers make it uniquely positioned to give Amazon a run for its money on this front.
“What Walmart brings to the table is the fact that they are going to be able to have same-day delivery out of 4,700 locations,” Hatch said. “They’re basically turning every store into a logistics center or a distribution center.”
Compare that to Amazon’s 175 fulfillment centers, and the competition intensifies.
Other perks include discounts at Walmart gas stations, reserved delivery slots and open-slot notifications, some access to Walmart’s new Express two-hour delivery offering, and early access to special deals, according to Recode.
Walmart is also packaging special in-store services into the mix, something that takes the Prime shipping model even further. It’s anticipated that Walmart will resurrect its Scan & Go service (which the company tested but ultimately discontinued two years ago) to allow Walmart+ members to check out in brick and mortar locations without waiting in line. Recode also reported that Walmart will be introducing a Walmart+ branded credit card soon after the service launches.
Walmart is going even further than just mimicking Amazon’s quick shipping services. This month, the company unveiled Camp by Walmart, an online family entertainment program/virtual summer camp that features celebrities like Drew Berrymore and LeBron James guiding viewers through different activities and challenges. Camp by Walmart is available on the Walmart app, but there’s speculation that this too will become a Walmart+ only offering in the future.
In many ways, it’s both an exciting and challenging time for Walmart to be entering the quick fulfillment subscription space. Walmart.com is the second largest marketplace in the U.S. after Amazon—it sees $21.9 billion in yearly sales as well as 308 million monthly visitors—and it’s one of the fastest growing ecommerce sites in the country.
Indeed, MarketplacePulse recently reported that Walmart’s Marketplace outperformed both ecommerce giants Amazon and eBay, with traffic increasing 55% back in April compared to February, and the Walmart app being the top download shopping app on the iPhone App Store in May. Plus, partly due to Walmart’s new partnership with Shopify, Marketplace sellers have doubled since July 2019, and more come to the marketplace each month.
Thirty-five percent of Amazon sellers are also selling on Walmart, so Walmart+ is, in many ways, the next sensible step for Walmart to compete.
In addition to that, Walmart merged its Walmart grocery and Walmart.com sites together earlier this year, allowing customers to load their online carts with products from across the store. Walmart’s grocery site has become the leading grocery platform in the country, and with that merger comes a surge in traffic to the entire Walmart Marketplace that could rise much higher with the launch of Walmart+.
That said, the new service has significant ground to make up. Amazon Prime is well established in the ecommerce subscription space with over 112 million US subscribers and over 150 million subscribers worldwide and currently has much more product to offer customers.
Walmart is also entering this space at a time when COVID-19 has led to widespread financial challenges for consumers and distribution challenges for sites like Amazon.
When Amazon was just starting, when the platform first allowed third-party sellers, some brands were reluctant to get onboard, Hatch said. Amazon had already established itself as a bookseller, and higher-priced goods weren’t trusted there.
Now Amazon sells luxury goods across the globe, and sellers who didn’t get on early have had lots of making up to do. According to Hatch, Walmart+ could prove to have a similar trajectory.
“These are basically the early days of Amazon,” Hatch said. “If you want to control how things end up, I would encourage brands to get on earlier rather than later.”
Walmart Marketplace is more exclusionary in the vendors it chooses than Amazon. This is great for brands who want to diversify channels, because they can compete more easily within Walmart Marketplace. Fifty seven percent of Amazon shoppers say they also shop on Walmart Marketplace, so there’s also a dynamic demographic of shoppers brands can reach in this space. With the addition of competitive pricing and services offered through Walmart+, it could be a homerun.
Another thing that’s interesting about Walmart+ is that it allows luxury brands that wouldn’t otherwise sell their product in-store to sell it on Walmart’s online platform. The company is shifting into a provider of not only low-priced items but high-quality products.
“I think Walmart is just going to totally transform their position in the industry, and not by taking the leader’s spot, but being in a place where they have a foundation to launch off of,” Hatch said.
Walmart Marketplace is still a developing marketplace, and it doesn’t have the same level of support Amazon does. The addition of a developing subscription service could add more challenges at first, but it’ll be an exciting platform to watch over the next few months.
To learn more about selling your product on Walmart Marketplace, contact us below.
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Entering the ecommerce landscape is a huge undertaking for any brand—it usually requires a large investment in resources and expertise to really be successful. Any brand can quickly get in over their heads trying to navigate the nuances of SEO, fulfillment and logistics, distribution control, listing optimization, and meeting the numerous other requirements and administrative tasks to show up well on marketplaces.
Unfortunately, because it’s so easy for third party, gray market, and unauthorized sellers to obtain and sell products online, many brands find themselves pressured to execute an ecommerce plan without the right resources to succeed on marketplaces and their other channels.
So, for brands looking to enter the ecommerce space or improve their current and future performance, it makes sense to partner with an ecommerce consultant.
Pattern’s global presence and proven success with hundreds of brands has allowed us to develop highly effective ecommerce consulting services. We can guide your brand to navigate issues both large and small in marketplaces worldwide. To maximize your ecommerce efforts, you’ll need to understand what an ecommerce consultant does and how to select one who drives the right value for your brand and products.
An ecommerce consultant is a specialist in the ecommerce space who can give you personalized guidance on how to market your products and grow their presence on digital marketplaces.
An ecommerce consultant should be able to analyze your brand, audience, category, opportunity, and current roadblocks and help you understand how to utilize your resources (or what resources are missing) to be most effective in capturing your opportunities in the ecommerce space.
Not sure how to evaluate a consultant? Here are 4 key attributes to look for as you make your choice.
At Pattern, we prioritize brand obsession for a reason—we know that a brand-centered mindset makes a crucial difference in the outcomes and results our partners achieve. So in our experience, when you begin your search for an ecommerce consultant, it’s important to look for a partner who is specialized in ecommerce, invested in the product, and passionate about helping brands build and improve their strategies. Typically, this means finding someone that consults exclusively for ecommerce marketplaces, rather than choosing a consultant who offers many different services.
It’s also important to avoid choosing a consulting partner who can’t deliver the right experience for your brand. The best indication of whether your potential consultant can do that is to review their history, data, and results with other brands. Ask if they’ve helped others in your selling category, if they’ve solved specific issues your brand is facing, and why they feel you are a good fit. The key is to leave the conversation feeling confident that you understand your consultants’ capabilities and whether or not they match up with your needs.
It’s best to pick a consultant who knows how to guide a brand onto and through multiple marketplaces worldwide. You’ll want to take a look at your long-term strategy and think about the regions and platforms you’re currently on and where you might want to take your brand in the future. If your consultant is truly great at what they do, they’ll be able to help you perform well enough with your current product roadmap that it’ll be a no-brainer to expand your presence at the right time.
The most effective partnership with an ecommerce consultant will be able to give you both recommendations and point you to solutions for making those changes in your planning, processes, and execution. Your time and money is valuable, so you want to make sure that you’re spending it as efficiently as possible as you follow your consultant’s advice. So, before you commit to an ecommerce consultant, ask about the resources and concrete solutions they typically recommend to the brands they work with.
Finding an ecommerce consultant that checks the boxes can be a difficult task. At Pattern, our entire focus and drive centers around giving brands the tools and resources they need to succeed on domestic and international ecommerce marketplaces.
With over 100 global ecommerce consultants across 10 global offices, we have the right tools to partner with brands across the world to achieve better ecommerce success. We give specialized advice, then make sure our partners have all the adequate SEO, social media, CRM, Amazon multi-channel fulfillment services, and ecommerce outsourcing services they need.
Interested in ecommerce consulting services? Set up a call here to learn what Pattern can do for your brand on global marketplaces.
If you’re interested in expanding your brand internationally, you’re probably familiar with Tmall. Tmall is Asia-Pacific’s (APAC) largest marketplace, and indisputably the biggest ecommerce powerhouse in the world. It represents a huge opportunity for many brands, but entering the space is also a big challenge to take on.
At Pattern, we recommend brands looking to enter international markets should first focus on dialing in their domestic presence. Once you’re satisfied that your brand is well-represented and optimized locally, you’re ready to think about tackling new regions, like APAC, and launching on marketplaces like Tmall. Our top advice for entering Tmall is to understand and strategize around its three most important metrics: service, delivery, and content.
Service, delivery, and content ratings are the three elements that make up Tmall’s Detailed Seller Rating (DSR) score. Each component is scored on a scale of 1-5 that is displayed publicly on your brand’s Tmall flagship store page. This is meant to help consumers decide whether or not to purchase your products.
DSR scores are important because they’re highly influential in driving conversions—customers see DSRs as a way to quickly understand if a brand is trustworthy and worth buying from. They also matter quite a bit to Tmall itself—they monitor these scores and will take action to close flagship stores with low scores.
Let’s go over each element of the DSR score and some steps you’ll need to take to achieve high ratings.
Service is a huge ecommerce component in APAC marketplaces. In most other regions, product listings are static, and consumers use content and reviews to make a decision about what to purchase. On Tmall, consumers want to interact with your brand and test its validity before buying—each transaction takes at least one human interaction to convert.
So, to get a great service rating, you’ll need to have a large, established customer service team dedicated to Tmall sales that can offer real, human touchpoints and very fast response times. To get an idea of the speed your agents should be capable of producing, in our Tmall benchmarking exercise, 92.5% of brands’ customer service agents replied to queries via live chat within 30 seconds, 5% replied within one minute and the remaining 2.5% of brands took longer than a minute. So, look for a Trade Partner (TP) that has enough resources to compete with those numbers, support your sales, and maintain a good DSR score.
Another thing you’ll really want to focus on is a high-quality delivery experience for consumers. As in other regions around the world, Tmall consumers have high expectations for their delivery experience. In our Chinese consumer polling report that targeted consumers buying from Tmall Global, we found that 6% expected same-day delivery, 15% expected next-day delivery, and 46% expected 2-5 day delivery.They want to receive their products fast and they want the products to be undamaged and pristine upon arrival.
So, to achieve a high score for your delivery capabilities, we highly recommend partnering with a TP or ecommerce accelerator like Pattern (which serves as a TP) who has the ability to facilitate your distribution. Make sure your TP has the right infrastructure in place to support high-quality logistics experiences for all of your consumers—they should have an established, well-oiled delivery process in place and the capability to fluidly add you to their current fulfillment system.
As in every digital marketplace, content is a huge component of the decision-making process for consumers on Tmall—they can’t touch your product with their hands or see it in person before buying, so it’s important they’re empowered to make a good decision on whether or not to purchase based on the videos, images, and copy.
The goal is to make all of the content and relevant information on your flagship site easily-accessible—consumers should be able to visit your page and make a decision about whether or not to buy without navigating to a new site/page and taking their conversions with them. Images with text and extensive product details are a great way to do this, as well as making sure your service team can speak to all aspects of your product with any consumers (via text or chat).
As the world’s foremost brand partner for ecommerce acceleration, Pattern truly understands the significance of international expansion. With regional offices around the world, Pattern knows how to successfully launch and grow brands on Tmall and other marketplaces, with the data, insights, and marketplace intelligence to build the metrics that matter.
It’s important to have a fantastic brand presence, a knowledgeable guide, and a clear go-forward strategy for your best chance at success. With our in-country resources, expert teams, and extensive experience in growing brands around the globe, Pattern can help you get there.
Set up a call to get your international expansion strategy in motion.