Walmart has discontinued the $49-per-year membership program ShippingPass it introduced in June for two-day delivery service, as the big-box retailer continues to challenge Amazon’s dominance in ecommerce. Accompanying this announcement, Walmart is also lowering its free shipping order minimum from $50 to $35. Over two million items will be available for free express delivery service, according to Walmart. In comparison, Amazon sells Prime Membership, which includes free two-day delivery on over 50 millions of items with no minimum per order, for $99 a year.
What Brands Need To Do
While it seems unlikely that Walmart will be able to convince the majority of Amazon Prime members to switch, the move at least shows Walmart is determined to compete with Amazon for the non-Prime U.S. households. As more and more consumers turn to online shopping for the convenience and flexibility, brick-and-mortar retailers need to learn from their online competitors and start branching out into the ecommerce space and exploring new ways to modernize their shopping experience.
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State Farm has partnered with on-demand courier service Postmates and Chili’s to capitalize on the “housegating” trend among football fans for its latest digital campaign. On Nov. 27, the first 5,000 people ordered a special “Cali BBQ’ritos” from Chili’s on Postmates got the item delivered to their doorsteps for free. The offer was available to residents in nine markets in the South and Southwest regions, including Phoenix, San Diego, Dallas, Houston, Denver, and Los Angeles. To promote this initiative, State Farm rolled out Facebook, Instagram, and Twitter ads on Saturday to target the NFL fans.
What Brands Should Do
This new campaign from State Farm and Chili’s continues an ongoing trend of brands teaming up with on-demand delivery services to reach potential customers with products or branded experiences. Most recently, IKEA partnered with Uber to send free meal-planning kits to lucky customers in NYC as part of its Thanksgiving campaign. As more and more consumers start to actively avoid traditional advertising with the help of ad-blockers and ad-free subscription services, brands need to preemptively branch out and explore non-conventional marketing channels to reach customers.
Uber just opened up its express delivery service UberRush by launching an API for brands and app developers to tap Uber’s army of drivers, bikers, and messengers to deliver goods on demand. The ride-hailing company stated in January that it had started testing the UberRush API in a private beta, and now the service’s API is publicly available to anyone who wishes to include a delivery option in their app.
Moreover, Uber has also introduced a Scheduled Rides feature that allows users to arrange a ride up to 30 days in advance. Scheduled Rides is rolling out in Seattle first, followed by other markets that Uber deems “top business travel cities.” Two weeks ago, Uber rival Lyft started testing scheduled rides in San Francisco, but only for 24 hours in advance.
What Brands Need To Do
Both announcements from Uber point to its determination to extend its service, which also brings new use cases for brands to leverage Uber’s service to improve customer experience. Retailers can take advantage of the public UberRush API to integrate on-demand delivery service into their mobile shopping experience. Although Scheduled Rides are limited to self-arranged pickups for now, it could certainly grow into a great tool for brands to reward their customers and incentivize them to visit stores or attend events.
Source: TechCrunch & The Verge
Walmart is partnering with Uber and Lyft to test an on-demand grocery delivery service beginning within the next two weeks in Denver and Phoenix. Walmart will charge a $7 to $10 delivery fee when online orders are placed so customers don’t need to pay the Uber or Lyft drivers when their orders arrive. This new services puts Walmart in direct competition with Amazon, which offers similar services via Prime Now and AmazonFresh.
What Retailers Need To Do
Walmart has been taking measures to modernize its online retail experience in order to effectively compete with Amazon, including launching a mobile payment app in December and testing an online order pickup program. This new move marks a significant step in Walmart’s ecommerce expansion as the partnership with two leading ride-hailing services gives it a huge logistical boost to fight against Amazon. Retailers need to take a cue from the two retail giants and start testing similar on-demand programs to meet the growing consumer demand for convenience and instant gratification.
To learn more on what retailers can do to reach today’s connected shoppers across sales channels, check out the Boundless Retail section in our Outlook 2016.
Source: The Verge
Coca-Cola Israel teamed up with Gett, a car-hailing app popular in Israel, to create a TV ad that prompts viewers to buy a package with two bottles of Coke and a branded mini-cooler. Using an ultrasonic audio signal technology developed by startup DOV-E, the TV ad activates smartphones with the Gett app installed to deliver a notification which users can swipe to see the offer and make the purchase with one tap. Orders will be delivered straight to their door by Gett within minutes.
What Brands Need To Do
This innovative ad is a brilliant example of marrying on-demand delivery service with traditional TV commercials via the second screen, thus making traditional TV ads interactive and buyable. As consumers get increasingly accustomed to the convenience and expedition offered by ecommerce leaders like Amazon and on-demand delivery services, it is imperative that brands, particularly those in the retail and CPG categories, start exploring new forms of advertising and adding interactive, digital layers to their traditional ads to engage viewers and move them down the sales funnel.
For more information on how smartphone-powered shopping experiences are impacting the customer journey, check out the Boundless Retail section in our Outlook 2016.
Header image courtesy of Gefen Team’s Vimeo Video
With the advance in connected devices and local delivery economy, more and more brands are trying out new ways to help customers order and reorder without stepping into stores. This week alone, three major brands have come out with on-demand fulfillment services to better serve their customers:
• Stationery and office supply retailer Staples is tinkering with its iconic Easy Button to make it a connected device that can take orders via speech commands. Sources says the feature will focus on reordering, tapping into purchase data to discern the product preferences of each customer.
• Upscale grocery retailer Whole Foods has invested in delivery service Instacart and made Instacart the exclusive delivery partner for Whole Foods’ perishables with a five-year delivery partnership.
• New Samsung printers are hooked up with Amazon’s Dash Replenishment service so they can automatically reorder ink refills when the supply is running low.
What Brands Need To Do
On-demand fulfillment allows retail stores to double as digital distribution centers, lowering the barrier of entry for interactions with customers in the real world. These three brands offer some good examples for other retailers and CPG brands to follow in utilizing new technologies and services to meet the growing consumer demand for convenience and instant gratification.
For more information on how brands can modernize their retail experiences to better engage with customers, check out the Boundless Retail section in our Outlook 2016.
Sources: Fortune, Engadget, and Re/Code
Popular ride-hailing service Uber has been testing UberRUSH, an on-demand local delivery service, in New York City since April. Following last month’s confirmation that they will expand the courier program, today the company announced the official launch of UberRUSH in New York City, San Francisco, and Chicago. With its large fleet of drivers and bike messengers, Uber is no doubt looking to use its infrastructure advantage to take on existing on-demand delivery services such as Postmates and Deliv.
What Brands Need To Do
UberRUSH offers a great opportunity for local vendors to modernize their customer experience with on-demand delivery service. Although only available for local merchants in select cities at the moment, it seems reasonable to assume that Uber will be extending this service to more cities soon. And with Shopify and Clover as its launch partners to help with the onboarding process, UberRUSH has the potential to help establish Uber as an aggregator for small local stores in the brick-and-mortar retail space, similar to the way Amazon provides a platform for independent online vendors. That is something all retail brands need to be aware of.
The Wall Street Journal reported on Tuesday that Amazon is quietly developing an Uber-like courier service using crowd-sourced drivers, which means your next Amazon order could be delivered to your doorstep by one of your neighbors. Regardless of whether this could help the Seattle-based ecommerce giant solve logistic problems while cutting costs, this is undoubtedly the latest development in the ongoing trend where on-demand delivery services from tech companies and startups compete to take over the local economy.
For better or worse, Uber pretty much set the precedent for a rollout of on-demand services that all share the same basic principle—using your smartphone to get things you want, when you want it. Start-ups such as Luxe, Washio, and Postmates are just a few examples of businesses utilizing this basic principle in order to make people’s lives more convenient. Luxe allows users to avoid the hassle of urban parking by ordering a valet to pick their car up and park it for them. Washio offers premium dry cleaning and laundry services delivered to your door. Postmates allows users to order any item that is carried in a store or restaurant and have it delivered.
On Monday, on-demand delivery service DoorDash partnered with Trader Joes and Whole Foods to deliver prepared foods like sandwiches and wraps, putting them in direct competition with existing on-demand services. As more delivery services enter the market, Uber may no longer be the dominant player. The company has hit a snag as it strives to expand beyond just a “transportation service”, getting pushback from companies like Apple and Starbucks who would rather look to a more established delivery service like Postmates to deliver its products.
This evolution is great for consumers, because it empowers them to request services at their fingertips. However, from a brand perspective, this could be a scare, as small brands try to stay afloat in a sea of delivery options. Control is taken out of the brands’ hands and put into the hands of consumers making it imperative for brands to explore different approaches to brand marketing.
Editor’s note: this report is updated on 6/17 to add in the Amazon news.
Though a large company snapping up a young startup isn’t anything to turn heads anymore, when eBay purchased London-based Shutl, it meant that it could expand its on-demand delivery service, eBay now, into 25 cities by the end of the next calendar year. The service will start in Chicago, and then expand into Dallas. It comes on the heels of Google announcing a same-day delivery service in the Bay Area, Walmart’s same-day service pushing into Denver, and Amazon Fresh moving into LA. It’s a nebulous, crowded space, and eBay is doing its part to distinguish itself ahead of its competitors at present.