Walmart Amazon whole paycheck

Walmart-Amazon Whole Paycheck Tracker: Amazon’s Big Brand Woes And Walmart’s Robotics Push

The Whole Paycheck Tracker: Pulling Back And Pushing Forward

There was a lot of movement this week in the race for the consumer’s whole paycheck – in all directions. Both racers saw big steps forward; in Amazon’s case, that came in the form of its ongoing fight against counterfeiters attempting to sneak onto the marketplace. In Walmart’s case, the advances were yet another addition to its ever-growing robotic workforce.

But both also had a step back or two as well. Amazon’s relationships with big brands on their platform is looking quite a bit less healthy than it once was, while Walmart has seen grocery services lose some ground in terms of consumer appreciation, according to a recently released ranking.

Two big competitors, a lot of ground to cover – and a lot of motion that was not quite forward this week.

Amazon 

Big News of the Week: Another Big Brand Break-Up

Another one bites the dust. This week, IKEA announced that it plans to cut ties with Amazon, claiming the retailer decided to discontinue a smart lighting program that began in 2018.

“IKEA worked on a pilot project with Amazon in the U.S. for smart lighting in 2018. The project was a trial, and after it ended, it did not go live,” the company said. “We will continue to dialogue with different partners to test new ways to meet our customers’ [needs] now and in the future, whenever and wherever they want.”

Whether walking away will work, however, has been a matter of debate. It has been a popular move of late – Nike, Birkenstock and PopSockets have all recently pulled the plug on their official Amazon presence in the last few years. But the “wherever and whenever” of consumer digital shopping often ends up being on Amazon, as the eCommerce marketplace controls 38 percent of U.S. online spend.

Plus, even when brands leave Amazon, third-party resellers often keep those brands’ goods alive (and on sale) on Amazon, even after they’ve departed.

James Thomson, who is a former Amazon manager and now a partner at brand consultancy Buy Box Experts, said that’s because most brands are available on Amazon regardless of whether they want to be part of the site or not – which means the decision to leave could backfire.

“To say the brand has won by walking away – they haven’t won at all,” Thomson said. “Amazon has a massive security blanket called the third-party marketplace. Those products sell at huge volumes, they’re Prime eligible and most customers don’t know any better.”

But in order for the marketplace to be competitive, customers do have to be sure that those third-party retailers are selling the real deal, not clever counterfeits.

Which leads to Amazon’s second headline-maker this week…

Fighting the War on Fakes: Working More Closely With the Authorities 

Amazon wants the counterfeiters off its platform – and as of this week, the retailer announced it will cooperate more closely with law enforcement to get them off and keep them off.

The worldwide eCommerce retailer says that going forward, it will report counterfeit goods directly to U.S. and European law enforcement whenever it confirms that a fake item was sold through the site. The frequency and volume of Amazon’s contact with the authorities will increase, the unnamed source noted. In the past, Amazon only moved toward law enforcement action when it had a large cache of evidence of fakes, but the ongoing plan is to be more aggressive and proactive.

One source said Amazon will report merchant and company names, as well as product and contact information, to authorities – but only after confirming that fake items are being sold, closing the seller’s account and giving them time to appeal.

Counterfeits have long been a problem plaguing Amazon – and in the past, it has led to a breakdown of relations with brands like Nike and Birkenstock. Amazon has previously sued counterfeit sellers and introduced a counterfeit removal tool for official brands, though those efforts have met with mixed results.

In the last few weeks, the company has met with officials to speak about its ramped-up enforcement efforts. The hope is that Amazon’s wider net will help authorities make connections and ultimately pull more criminal counterfeiters out of circulation.

And finally, in more peaceful Amazon news…

Burying the Hatchet: Amazon and FedEx Figure It Out 

This week, there was some evidence of a thaw in the long-frosty relations between Amazon and FedEx, with an announcement that the eCommerce giant has lifted its ban on FedEx Ground as a shipping option for third-party merchants.

Amazon notified merchants early in the week that they could resume use of the FedEx Ground network to place orders through Amazon Prime. The shipping provider was banned right before Christmas and for a few weeks afterward. According to Amazon, the ban was brought on because FedEx Ground wasn’t meeting Prime delivery deadlines, which caused trouble upstream for Amazon with its Prime members.

A spokesperson said that FedEx Home and Ground were unblocked because FedEx has shown that it can meet Amazon’s shipping requirements.

“This is good news for our mutual customers, who have come to rely on the FedEx Ground offering,” a FedEx spokeswoman said. She added that the company’s ground unit did well during peak shipping season, with an average package travel time of 2.4 days and 18 percent being delivered early.

Walmart 

Big News of the Week: Robots on the Rise 

Walmart has gone in big for robots recently, and this week saw its latest robotics advance roll out. America’s largest retailer by sales reported this week that it will bring shelf-scanning robots to 650 additional stores in the United States by the conclusion of the summer of 2020.

The six-foot-tall Bossa Nova devices, which are said to be coming soon, move through aisles and send alerts to employees’ handheld devices when products are out of stock. According to reports, they tend to draw a lot of stares and gawking during pilot phases, and consumers often try talking to them.

The robots do not, at this point, answer back.

The new robots will become part of Walmart’s increasingly automated workforce, which also encompasses devices to unload trucks, collect online grocery orders and scrub floors. They are said to be part of CEO Doug McMillon’s efforts to bolster store performance, gain credibility and cut costs as the retailer takes on Amazon.

The shelf-scanners are said to speed up tasks that once took as long as two weeks and make them into a twice-daily routine. John Crecelius, Walmart’s senior president of store innovations, said per reports, “It speeds up the entire cycle.”

The news follows last week’s rollout of a grocery-picking robot called Alphabot, which is designed to quickly pick, pack and deliver orders.

Step Back of the Week: Losing a Step in Consumer Estimation

Walmart’s lead in grocery on Amazon has been a store of strength in its race for the consumer’s whole paycheck – but news came this week that it had lost four spots in the annual Retail Preference Index, compiled by data science firm dunnhumby. The Index ranks consumers’ preferences for grocery retailers based on price, quality, digital integration, operations, convenience, speed, discounts and rewards. The report lists 14 grocery retailers that made the top quartile of 60 retailers evaluated.

Walmart remained in the top 10 in 2019, in the No. 9 spot – a solid showing, but for the fact that it fell from the No. 5 spot it held in 2018. Amazon, notably, ranked third for both years.

Trader Joe’s, a deep discounter, ranked No. 2, falling from the top spot last year. Amazon ranked No. 3 both years, while it has a much smaller brick-and-mortar grocery footprint than its grocery competitors.

“The one thing that all top quartile retailers have in common is an excellent value core,” the report states.

Walmart ranked higher in some areas than others – price and digital service were areas that both received strong marks. The area where Walmart tended to have a fairly commanding lead was defined as “proximity, one-stop shopability and right product variety, and that helps shoppers overcome certain challenges in their lives.”

As always, it seems, Walmart wins the ubiquity race.

But the race for the consumer’s whole paycheck? That remains ongoing. Both sides are ramping up their efforts in some areas, and Walmart’s robotics march is particularly notable. But both have deficits to overcome – and in some core areas.

Which means the race will go on – and we’ll keep you posted on which way it twists next.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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