Amazon Prime has been an enormous influence on e-commerce, but this online juggernaut is beginning to show cracks. Now is the time for arch-rival Walmart to swoop in with a Prime-like offering that strikes at the weaknesses Amazon has introduced into its formidable loyalty program: price, a lack of focus, and competing subscription services.
Here’s the problem. 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. But while these additions are superfluous to many a user’s needs, everyone pays for them whether they’re used or not.
That’s part of the strategy, of course — if you know your customer won’t stop paying for a subscription, you can use that to squeeze the life out of other subscriptions they might pay for, and redirect that money to yourself. Prime Video and Music, for example, are clearly meant to take the place of Netflix or HBO and Spotify or Apple Music. Why pay for two? And if you have to choose, well, it’s easier to quit HBO than Prime.
This only goes so far, though. For years users have been subject to these pressures, watching the price of Prime rise all the while, and meanwhile other services are getting better and better. Streaming services and exclusive content have multiplied, and Prime users are frequently left out in the cold.
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.)
Leveraging Walmart’s brick and mortar presence is important, but it’s hard to say what they have the leeway to try there, as it’s likely a delicate balance. But it’s a major advantage to have regular visitors to major retail locations, whereas Amazon has to either home-deliver or install lockers.
There are already indications this is happening — a pilot with a smart-lock company for home delivery, a rumored streaming service, cashierless(ish) checkout (even easier with an account), revamping of existing grocery delivery partnerships, emphasis on cloning or promoting existing services that match or exceed Amazon’s… it looks a lot like a shift to an end-to-end loyalty service.