Amazon is a large and powerful company that dominates the world of online selling. Walmart is a large and powerful company that dominates the world of bricks & mortar selling. These two firms are starting to come into conflict when it comes to next-day home delivery as Walmart starts to move into online sales and Amazon starts to move into home delivery. The product managers at Amazon are going to have to sharpen their skills and review their product development definition in order to go into battle with the product managers at Walmart.
The Coming Battle
Amazon has announced that they are making 10 million products available for free one-day delivery to Prime members in the United States. The Amazon product managers are locked in a battle over faster shipping speeds with Walmart. Walmart recently announced that they will begin offering free next day delivery shipping on 200,000 products for shoppers on some orders that have been placed in a limited number of cities. What’s going on here is that online shoppers are becoming more and more demanding and this is causing Amazon and Walmart to keep trying to one-up each other.
The Amazon product managers are not revealing all of the details about their home delivery plans. They have not specified which markets the new shipping option will be available in. They also have not said when the new one-day delivery service will be available to all 100M Prime members. The products that will be available for this service are some of Amazon’s most popular products. However, 10 million products are only a small part of the over 100 million products that Amazon currently offers for free two-day delivery. One result of this new next-day delivery push is that it is creating a need for more warehouses for both firms.
Quick delivery has been something that Amazon has been offering for a long time. Amazon has been offering one-day shipping on a limited number of items. Additionally, they have also offered same day delivery on some orders that were over US$35. The Amazon Prime Now operation is used to fulfill same day orders. The good news for Amazon customers is that Amazon’s new one-day delivery option does not require a minimum purchase for Prime members. Amazon is committed to making next-day delivery the standard for Prime members and in order to make this happen, they are investing $800M.
How This Battle Is Going To Be Won
The Walmart product managers fully understand that they are locked in a battle with Amazon. Shortly after Amazon announced that they were going to be offering next-day delivery Walmart issued a press release reminding their customers that Walmart’s home delivery service did not require that their customers to pay a membership fee. This was a reminder that to be a member of Amazon’s Prime program costs $119 per year. When Walmart started offering their free next-day delivery they did so in Phoenix, Las Vegas, and Southern California. They did place restrictions on which orders they would deliver: the orders had to be over $35. Walmart plans on expanding their next-day delivery service to 40 of the top 50 U.S. metro markets later this year.
Two years ago Walmart tried to create a program that would allow them to compete with Amazon’s Prime program. The Walmart subscription program was called ShippingPass, it cost $49 per year, and subscribers could get free home delivery of Walmart products. The Walmart product managers abandoned this program and started offering free two-day shipping for orders of at least $35 or more. Although digital sales still make up only a small part of their overall total revenue, these sales are growing at a rapid pace. In the last fiscal year, Walmart’s e-commerce sales grew by 40% to reach $15.7B. Now that kind of growth would look good on anyone’s product manager resume.
The Amazon product managers clearly have some big competitive threats coming from Walmart. However, they have taken the position that they are not going to pay a great deal of attention to what Walmart is doing because they believe that to do so would be distracting from their goal of better serving their customers. They believe that their offerings to their Prime customers are currently unmatched by any other firm. However, the Amazon product managers need to be aware that not all of their Prime customers are happy with the service that they are receiving. Some customers have stated that they are not receiving their products in the time that Amazon had promised them. To deal with issues like this, Amazon has established customer-service lines that are dedicated to making sure that deliveries are made when they were promised.
What All Of This Means For You
As product managers it is always exciting when giants collide. Right now in the world of home delivery, Amazon and Walmart are both gearing up to battle for the hearts and minds of customers when it comes to next-day delivery services. It would seem as though Amazon has a head start, but Walmart is willing to make an effort to catch up. Which set of product managers will use their product manager job description to be victorious in the end?
Amazon has recently stepped up the competition by announcing that they are willing to deliver 10M of their products to customers who order them the next day instead of the normal two day window. The Amazon product managers have been a bit vague as to when this will happen and who can take advantage of it. Additionally, 10M products is just a small slice of the over 100M products that Amazon currently offers. Amazon wants to make next day delivery the standard for its Prime subscription program members for all purchases no matter the amount. Walmart has been reminding its customers that they don’t need to subscribe to a service to get free home delivery from them. However, Walmart is currently only offering free home delivery in specific markets. Walmart did try to create a Prime like program in the past, but they have since given up on it. Digital revenue is a significant growth area for them. The Amazon product managers are trying to focus on their Prime customers and not worry about what Walmart is doing, but they need to work to keep their customers happy.
Once customers discovered that they could quickly get the things that they had ordered online, they wanted more. Both Amazon and Walmart’s product managers are trying to create next-day delivery services that can meet the needs of their customers. The services offered by both companies may look similar, but it’s going to be up to the product managers to find ways to make them stand out from each other. When customers become used to next-day delivery, both companies will be under to gun to find ways to get products to customers the same day that they order it. This is going to be very interesting to see how it all works out.
Question For You: Do you think that Amazon will ever be able to offer next-day delivery for all of their products?
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What We’ll Be Talking About Next Time
So who among us has not heard about the famous TV show “American Idol”? This is the show where anyone can try out to be on the show and the best singers are then selected to compete in a multi-week competition in which one of them will eventually be crowned the “American Idol” and potentially get a lucrative recording contract. This show used to be very popular, then it fell out of popularity and eventually ended up getting canceled. However, now another network is thinking about bringing it back. Can their product managers change its product development definition and bring a once popular TV show back from the dead?