Got the @2pminc news alert that Walmart announced Walmart+ yesterday to take on Amazon Prime.
There's actually a case to be made that this is the perfect beachhead to take on Amazon and win back the retail crown.
Here's the data 👇
There's actually a case to be made that this is the perfect beachhead to take on Amazon and win back the retail crown.
Here's the data 👇
As @ctrlzee and @shanconnellan pointed out the big win here is Walmart groceries are cheaper without the Whole foods brand tax.
Throw in a 5¢ per gallon discount on gas and you have a good recipe for Walmart's target buyer: less affluent shoppers in rural and suburban areas. 2/
Throw in a 5¢ per gallon discount on gas and you have a good recipe for Walmart's target buyer: less affluent shoppers in rural and suburban areas. 2/
Those folks making under $75k per year haven't adopted Amazon Prime as quickly.
Sure, it's relative: 30-50% vs. 60-70%
Yet, if you're looking for a chink in Amazon's seemingly impenetrable armor this is where to attack - the market Amazon hasn't sucked up yet.
3/
Sure, it's relative: 30-50% vs. 60-70%
Yet, if you're looking for a chink in Amazon's seemingly impenetrable armor this is where to attack - the market Amazon hasn't sucked up yet.
3/
Further, although these customers spend more over their lifetime with Walmart, they don't want to pay $120/year for Amazon Prime.
Amazon's priced them out and Walmart+ is there to swoop in with their $100/year price point. 4/
Amazon's priced them out and Walmart+ is there to swoop in with their $100/year price point. 4/
So Walmart+ is going after a larger customer base with a cheaper product in markets where Whole Foods doesn't exist (surprise - most of America). Sounds like good defense, but what about offense?
This is where I need to unleash the @profgalloway RUNDLE mating call. 5/
This is where I need to unleash the @profgalloway RUNDLE mating call. 5/
Walmart doesn't have much recurring revenue.
Through Walmart+ they'll unlock millions in recurring revenue, which pushes valuation up and fattens coffers with more investment to take on the Lex Luther of retail.
What a world where Walmart becomes the underdog. :)
6/
Through Walmart+ they'll unlock millions in recurring revenue, which pushes valuation up and fattens coffers with more investment to take on the Lex Luther of retail.
What a world where Walmart becomes the underdog. :)
6/
What's the bearish case though?
Well, streaming. You may think - who the hell needs Amazon Prime when I have Netflix, Hulu, et al.
Answer: Everyone.
Streaming was the most preferred feature relative to others when looking at 11k Amazon prime customers. 7/
Well, streaming. You may think - who the hell needs Amazon Prime when I have Netflix, Hulu, et al.
Answer: Everyone.
Streaming was the most preferred feature relative to others when looking at 11k Amazon prime customers. 7/
Walmart's also missing the other 30 features that Amazon Prime includes. Beyond shipping and streaming, there isn't one feature of Prime that wins out.
Instead, Prime deploys the "kitchen sink bundling strategy" to get different fragments of the market on-board. 8/
Instead, Prime deploys the "kitchen sink bundling strategy" to get different fragments of the market on-board. 8/
I'm bullish:
1. Walmart doesn't need to win. They need to take market Amazon doesn't have, and supplement enough Prime users. (ie. you can have Netflix AND Hulu)
2. Middle America cares about grocery/gas prices, which is their initial target. They need to add more though. 9/
1. Walmart doesn't need to win. They need to take market Amazon doesn't have, and supplement enough Prime users. (ie. you can have Netflix AND Hulu)
2. Middle America cares about grocery/gas prices, which is their initial target. They need to add more though. 9/
Ok, back to my analyst pod:
If you made it this far and got value, retweet the thread.
More subscription data and analysis coming your way tomorrow. fin/
If you made it this far and got value, retweet the thread.
More subscription data and analysis coming your way tomorrow. fin/
