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“Ecommerce Briefs” is my occasional series on news and developments that impact online merchants. In this installment, I’ll report on Amazon’s program allowing brands to promote new products, Walmart.com’s focus on grocery sales, and the growth of U.S. click-and-collect sales.
Amazon Sellers Can Promote Products
In April, Amazon introduced “Manage Your Customer Engagement” (MYCE), a program that lets third-party brands promote products via email campaigns directly to Amazon customers who follow the brand. MYCE, still in beta, is available to registered brands that have an Amazon Stores page with followers.
The program enables brands to communicate directly with Amazon shoppers for product launches, which was previously disallowed. Product positioning on the marketplace is based on algorithms derived from purchasing data, putting new products at a disadvantage as Amazon prohibits sellers from directly soliciting customers. Until now, sellers could communicate with customers via a messaging feature on Amazon’s site only when customers questioned their order status.
Amazon is still not sharing customer contact information with brands as the company, not the sellers, sends the emails. With MYCE, Amazon will share only aggregate data with brands, such as the total number of emails in a campaign and the overall response. An Amazon moderation team reviews all campaigns for content. Amazon has stated that it intends to add functionality to the program.
Walmart.com Focuses on Grocery
In its quest to compete with Amazon, Walmart continues to focus on fast delivery and curbside pick-up, with customers utilizing these services mostly for grocery items. The company allocated an additional $14 billion over the past year to optimize its distribution network.
CEO Doug McMillon told analysts during the first quarter earnings webcast that the Walmart+ subscription membership, used mostly for grocery pickup and delivery, is driving Walmart’s better-than-expected financial performance.
Based on a survey of 1,000 adults by TABS Analytics, in 2020 Walmart passed Amazon as the top online food retailer. The firm estimates that Walmart accounts for about 30 percent of online grocery transactions, similar to its level in 2019, but Amazon’s share fell to about 27 percent from 33 percent in 2019. Amazon disputes this claim.
Walmart+, which costs $98 a year, gives members same-day delivery on 160,000 items, a fuel discount at certain gas stations, and no-wait checkout at Walmart stores.
Walmart has not disclosed the number of Walmart+ subscribers. Estimates by research firms vary widely from 12 million to 60 million. Pymnts.com, for example, estimates the number of Prime and Walmart+ subscribers as of March 29, 2021, to be 165.27 million and 60.78 million, respectively.
According to Pymnts.com research, “…one of the key drivers of new subscriptions to Walmart+ is its leadership in groceries and the convenience that comes with running over 5,000 U.S. stores. In short, the new data shows that when it comes to just grocery purchases, Walmart’s pricing advantage — combined with its in-store and curbside pickup options — is clearly attracting people to its membership program and getting them to shift their behavior. Twenty-eight percent of Walmart+ customers said they made the shift in their grocery-buying during the pandemic compared to about 19 percent of Amazon customers who did.”
Online purchasing with curbside or in-store pick-up boomed during the pandemic. Grocery shopping drove the increase. According to eMarketer, in 2019, 39 percent of click-and-collect buyers purchased groceries. In 2020 that increased to 58 percent. eMarketer expects click-and-collect to continue to grow, although slower than in 2020.
American shoppers spent $72.5 billion via click-and-collect last year, a 107 percent increase over 2019. Walmart, The Home Depot, Best Buy, Target, and Lowe’s accounted for $44.2 billion of the total. Click-and-collect accounted for 42 percent of combined ecommerce sales at these five companies.
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