’Tis the season for shopping — and capturing the spend of consumers with a newfound enthusiasm for commerce of all kinds. The competition for the consumer’s whole paycheck is, of course, a year-round pursuit for both Amazon and Walmart, but for the next six or so weeks the normally spirited competition will turn into a fast-paced race on steroids as the two attempt to elbow past each other — and almost everyone else in the retail game steps up their game for the season.
This week the key battle grounds were in familiar territory, the grocery aisle, with a sprinkling of voice commerce on both sides keeping things interesting.
Amazon
Big Play of the Week: The Grocery Double-Down
Amazon had not one but two big grocery announcements this week.
The first big news over the wires was official confirmation that the eCommerce giant will open an Amazon branded grocery store next year in California.
Details are scant about what that shop might look like, but what is known as of earlier this week is that Amazon has posted job listings for four new positions connected to the forthcoming store, it will be a separate entity from Whole Foods and it won’t use Amazon’s cashierless Go technology in favor of traditional checkout methods. Additional locations are reportedly being considered for Philadelphia, Chicago and Los Angeles.
The company described the store, which will be in Woodland Hills, as “Amazon’s first grocery store.”
Whether Amazon is planning a chain, what type of items or pricing it will feature or what the store will be called all remain up in the air.
“When it comes to grocery shopping, we know customers love choice, and this new store offers another grocery option that’s distinct from Whole Foods Market, which continues to grow and remain the leader in quality natural and organic food,” said an Amazon spokesperson on the news, adding that more Whole Foods locations are forthcoming.
Win of the Week: Amazon Owns the Voice Market
While Amazon’s race with Walmart for the consumer’s whole paycheck is certainly attention-grabbing, it always bears remembering that Walmart isn’t the only entity Amazon is racing. In the world of voice commerce, Amazon’s main competitor is Google with its Home Assistant and Nest line of smart home products.
But Amazon is winning that race a bit more convincingly according to data out this week. Amazon Echo is the clear leader, outselling Google Home by a wide margin, according to analyst firm Canalys.
Smart speakers on the whole are doing well — sales are up across the board 45 percent year on year in Q3 2019, according to the report. And Amazon is the sales leader in the global market, capturing 36.6 percent of the smart speaker market with 10.4 million in Echo sales and 65.9 percent annual growth.
China’s Alibaba ranked second, capturing 13.6 percent of the market. Chinese smart speaker manufacturer Baidu was third, with 13.1 percent and Google came in fourth, with 12.3 percent. Xaomi was fifth, with 12 percent of the market share, the report showed.
Amazon’s lead has remained fairly commanding and complete since launching the Echo and Alexa in 2014. Alexa is found in more than 60,000 smart home devices from 7,400 companies, whereas Google Assistant is found on about around 10,000 devices from more than 1,000 companies.
Loss of the Week: Nike Says So Long to Amazon
Nike is signing off of Amazon, announcing earlier this week it will be pulling its product listings on the site, nevermore to sell on Amazon. The move ends a two-year eCommerce partnership between the two brands.
The move got quite a lot of attention, and stirred no small number of concerns, but in many ways it was not quite as unexpected as headlines made it seem. Prior to their 2017 eCommerce partnership, Nike for many years opted out of an Amazon placement due to concerns that it would weaken the brand. It was also upset about the many unauthorized sellers on Amazon.
Going forward, the sneaker and sports apparel company says it will pursue a new retail path based on partnerships and its direct business.
“As part of Nike’s focus on elevating consumer experiences through more direct, personal relationships, we have made the decision to complete our current pilot with Amazon Retail,” the company said in a statement to Bloomberg. “We will continue to invest in strong, distinctive partnerships for Nike with other retailers and platforms to seamlessly serve our consumers globally.”
Some have wondered if it will trigger a mass exodus by big-name brands from Amazon, as brands realize that maybe they don’t really need Amazon to reach customers after all. Many analysts have concluded this is largely unlikely. Nike is a very big and well-known global brand with a hardcore following that numbers in the millions, and can certainly afford to go it alone.
But even among big brands, there aren’t a whole lot that “can be as selective as Nike,” GlobalData retail analyst Neil Saunders noted, and the feared tidal wave of brands exiting is unlikely.
Particularly at the start of the holiday shopping season.
And of course Amazon was only half the story of the holiday shopping sale season’s early excitement and drama.
Walmart
Big Play of the Week: Walmart and Siri Join Forces
The big voice news was Amazon’s this week, but the most head-turning voice move may well have come out of Walmart.
Walmart said earlier this week that Walmart Voice Order is coming to Siri, and that Apple users will now be able to add items to Walmart grocery lists and order them, all by just using their voice.
“[We’re] proud to announce that partnering with Apple, we’ve made Walmart Voice Order available on Siri,” Walmart said. “We are always looking for new ways to bring our customers the best experiences when buying Apple products from Walmart and when using their Apple devices every day.”
Users can access the service from an iPhone, iPad, Apple Watch, Mac, HomePod or in a vehicle with CarPlay capability. Adding goods to a basket involved giving Siri a command to “Add to Walmart” and then naming the product they want to add to their cart.
The system is not only designed to take orders, but learn about consumers such that it will fill in their specific preferences, even if they name general items. For example, a customer who says “add orange juice” will have their preferred brand added to their cart after a few orders.
With the addition of Siri, Walmart noted that roughly 80 percent of the country can order groceries just by using their voice. To use the feature, customers can go to the Walmart Grocery App and pick “Voice Shopping.”
Worry of the Week: Buttressing the Full eCommerce Offering
By all accounts Walmart’s eCommerce news out of its latest earnings report looked like a victory, with digital sales up 41 percent in the quarter. And while Walmart CEO Doug McMillon certainly didn’t express dissatisfaction with that outcome, nor with Walmart’s exploding digital grocery business that is the power behind the digital sales throne, he did express the firm’s desire to do better in the eCommerce realm.
Particularly when it comes to general merchandise — where sales haven’t been as strong and the path to profitability has been long and winding.
“Grocery pickup and delivery, along with new offerings like Unlimited Delivery and InHome Delivery, will help us unlock advantages we have to serve customers in a way that reduces friction and enhances convenience,” McMillon said. “We need to translate this repetitive food and consumable volume into a stronger Walmart.com business that’s profitable over time, so that’s what we’re working on.”
There is, however, much work still to be done. Walmart went on something of a digital DTC brand buying spree in the last few years, only to find that the firms it snapped up — like Modcloth, Bonobos and Eliqui, among others — have had a hard time delivering revenue at the hoped-for level. ModCloth has already been sold off at a loss, and while Walmart hasn’t announced any other major castoffs as of yet, it has announced a moratorium on buying any more eCommerce brands unless “a deal too good to pass up” comes along.
Still, given Amazon’s mastery and dominance of this arena, eCommerce sales are not a place where Walmart can fall behind or fail to make progress if it wants to stay in the whole paycheck race.
Sprint of the Week: Let The Black Friday Mania Begin
Black Friday may technically still be a two weeks from now, but never let it be said Walmart wasn’t interested in getting out a step or two ahead.
Walmart “leaked” its annual Black Friday ad to cap off this week, in hopes that when consumers build their Black Friday roadmaps they come to Walmart ready to make an extensive, and if all possible, exhaustive detour.
The big standout is, as always, the big TVs with the much smaller than normal price tags — though Walmart is apparently taking a go-deep-or-don’t-bother approach this year with big sales on laptops, kitchen appliances, smartphones and tablets, home products and toys, and among other things.
Amazon’s Black Friday add has also officially dropped — though it perhaps has gotten a bit less notice than Walmart’s, since Amazon has been pushing its current sales just a bit harder.
But of course, as the actual biggest shopping weekend of the year draws closer, one can expect the emphasis will change as the two biggest and fiercest competitors in retail start getting really serious about outgrowing each other down the spending stretch in December.
It should be an appropriately exciting race for the consumer’s whole paycheck to merit the fireworks that will go off at the close of 2019 on New Year’s Eve. And we look forward to being your guide through it all.
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