🥕 Walmart+ takes on Prime
Hey Snackers,
In a sea of delivery, only 1 service enjoys unanimous love: doggy delivery. Nothing purer than a Chocolate Lab getting "paid with treats and massages of his furry head." The biz model isn't too scalable, but we're still holding out for the Initial Puppy Offering.
Markets ticked up and the Nasdaq notched another record close on big tech stock gains. On Wednesday, the US reported another daily record of more than 59K new confirmed COVID-19 cases (for a total of over 3M).
Walmart is launching a $98/year Amazon Prime rival (but it's really a grocery war)
Darth Bezos sweating in his Prime Lair... Recode just reported that Walmart's own Amazon Prime-like subscription will launch this month. "Walmart+" (creative) is coming in hot at $98/year (Prime goes for $119). Here's how the reported perks stack up:
- Delivery: Unlimited same-day grocery/merch delivery, plus limited Express 2-hour delivery. Prime has free: 2-day shipping, same-day delivery in some ZIPs, and grocery delivery (in eligible regions).
- Discounts: Fuel discounts at Walmart gas stations, early access to product deals, and an available Walmart+ credit card. Prime has: Whole Foods discounts and some cash-back cards.
- Entertainment: Walmart's new entertainment platform (CAMP) features videos starring celebs (including LeBron). Walmart could gate it off for free to subscribers. Prime has: Prime Video and Music.
This is about securing the (grocery) bag... Walmart is the US market leader in groceries, which account for over 56% of its sales. Its online grocery biz drove a 41% jump in ecommerce sales last year. But gig and online competitors are creeping into Walmart's sacred shopping cart territory...
- Instacart: In August 2019, Walmart eclipsed Instacart with close to a 50% share of the egrocery market. But it slipped to 25% this March and Instacart soared to 57% share by April.
- Amazon: Over half of Walmart’s top-spending families now have Prime memberships. Walmart fears losing grocery customers to Amazon's egrocery.
Subscriptions are loyalty-builders... Attractive perks = subscription = customer "stickiness." Amazon's 15-year head start with Prime is a major reason why it's now worth over 4X Walmart. But Walmart is a grocery whiz — it can use that to suck people in with habit-building perks. Your weekly grocery splurge gets you buying bananas and pizza... and jeans and Madden '20 while you're at it.
Twitter might launch a paid subscription service (we know from a Twitter job post)
Cat's outta the virtual bag... Tweet this: Twitter stock jumped 7% thanks to a few words in a job description. Some Wall Street Sherlocks found this buried in a Software Engineer job description: “we are building a subscription platform.”
- Codename "Gryphon": That's the new subscription team Twitter inadvertently revealed. The now-viral new hire would work closely with the Payments team to lead "Subscription client work."
- Ad revenue makes up more than 80% of Twitter’s sales, and it's likely to take a hit from the corona ad-pocalypse — Subscription could be a key new revenue stream.
We have a few questions... Will everyone have to pay to use Twitter? Is Twitter spinning off a brand new premium Twitter (if so, please consider: "Twitter Titanium"). Twitter's past might shed light on how this could play out:
- In 2017, Twitter ran a survey to gauge interest in a paid subscription service for power users (like companies and news orgs).
- The "power user" premium: These paying users could get beefier analytics, breaking news alerts, and info on target demographic activity.
- Alternatively, Twitter could offer a Patreon-style product where you can subscribe to certain tweeters' exclusive tweet content.
Less dependence on ads could make Twitter a more civil place... Social media platforms are known and loved/hated for being free places to post and share. But their ad-dependent biz models mean algorithms that amplify the reach of posts generating the most engagement — that's often the most intense and divisive ones. A subscription model could liberate algorithms to focus less on the provocative posts since money is coming from somewhere besides engagement-driven ads.
What else we’re Snackin’
- Doctored: Walgreens will open 500-700 doctors offices inside its US stores — it's investing $1B to partner with VillageMD.
- Bowtied: 202-year-old suit maker Brooks Brothers files for bankruptcy as casual Friday cooled suit sales, then work from home froze them.
- Scroll: Instagram swaps out its Activity tab for its new Shop tab in a global test — it's trying to be the Insta-model version of Amazon.
- Boating: Uber will launch a commuter boat service ("Uber Boat") on the Thames River in London (you still can't get the AUX cord).
- Descending: United Airlines may have to furlough almost half its US workforce, despite receiving billions in government aid.
🍪 Thanks for Snacking with us! Want to share the Snacks? Invite your friends to sign up here.