The American economy is reopening for business and consumers are starting to head back toward their lives in the physical world. But shopping will likely see much of the great digitization wave that’s swept over it in recent weeks stay in place because shoppers like the speed and convenience, as PYMNTS consumer surveys indicate. That means Walmart and Amazon will square off more than ever when it comes to collecting their share of the consumer’s whole paycheck.
This week saw a lot of expansion efforts out of Walmart, while Amazon has been playing defense on several fronts. The latest developments:
Big News Of The Week: Mr. Bezos Is Going To Washington
News broke this week that Amazon CEO Jeff Bezos is willing to appear on Capitol Hill amid a series of increasingly pointed requests in recent months for him to testify.
Amazon confirmed via attorney Robert Kelner that it will cooperate with lawmakers looking to investigate the company’s corporate practices and that it’s willing to make appropriate executives available for questions.
Kelner noted that this “includes making Jeff Bezos available to testify at a hearing with the other [Big Tech] CEOs this summer.”
The announcement marked a change in attitude about Bezos appearing before the House Judiciary Committee regarding an antitrust investigation of Big Tech. But there’s evidence that if Bezos won’t come willingly, he might face a subpoena compelling him to appear.
Amazon had previously only confirmed it would send an “appropriate” executive to testify how the firm utilizes third-party data, but Congress made clear that Bezos was the only appropriate person. Last summer, Amazon Associate General Counsel Nate Sutton denied the firm had harvested information from third parties for its own use.
Security Save Of The Week: Blocking The Biggest DDoS Attack Attempt Ever
But fending off an increasingly aggressive Congress wasn’t Amazon’s only exercise in self-defense this week. Amazon Web Services also defeated the largest DDoS attack ever attempted.
According to ZDNet, the attack came with peak traffic volume of 2.3 terabits per second — the largest such effort ever recorded. Amazon was hit by the attempted attack in February and first detailed the issue in its first-quarter 2020 threat report.
The massive attack attempt was thwarted by AWS Shield, a service custom-built to defend the cloud-computing platform’s clients from being tagged by DDoS attacks. Where the attack originated or what end the attackers were seeking remains unreported.
However, this isn’t the first attack of this kind that Amazon has seen, although the firm reported that all previous attempts had been much smaller than 1 Tbps.
Partnership Opportunity Of The Week: Amazon’s ‘Not-Prime-Day’ Sale
Prime Day, the Internet’s favorite garage sale and made-up holiday, isn’t canceled, but it will be on hold for a few months. In its place, a new event is rising. On June 22, shoppers will reportedly have the big Amazon sale to look forward to.
Experts are predicting the promotion — dubbed the “Big Style Sale” — might be just the lifeline that apparel brands desperately need to reach radically diminished customer bases.
“You’ve got a bunch of brands stuck with merchandise and this is going to be an opportunity to generate cash,” Frank Poore, CEO and founder of e-commerce managed marketplace platform CommerceHub, told Forbes. “This summer sale is a way to make up for some lost ground and also help some [Amazon] sellers move merchandise because there’s a lot of apparel merchandise obviously piled up from spring.”
Moreover, given the build-up of inventory, this might be an unusual chance for Amazon to offer better-than-average prices on apparel. After all, brands of all kinds will be looking for a fast way to clear out spring and summer stock in anticipation of fall.
DealNews predicts Amazon will offer discounts of up to 50 percent on its own clothing brands during the Big Style Sale and will push other brands and retailers to do the same. And just as Prime Day inspires a lot of copycat sales, experts predict the Big Style Sale will do the same.
Amazon might also get the chance to sign on with new apparel players not currently on its marketplace, as the event might look pretty good to players who’ve seen their sales fall sharply during the pandemic.
Big Move Of The Week: The Shopify Marketplace Pair-Up
Walmart learned this week that sometimes the best way to build a new friendship is to share a common enemy with one’s new prospective friend. In this case, the new friend is Shopify and the enemy is Amazon.
Walmart and Shopify reached a pact to add as many as 1,200 Shopify sellers to the Walmart marketplace this year, with a particular focus on adding small- and medium-sized businesses (SMBs).
Shopify CEO Tobias Lutke has previously classified his company as “the rebel army to Amazon’s web empire,” and it seems like the rebels just gained access to millions of Walmart customers.
As for Walmart, the deal injects scale into attempts to build out its third-party marketplace while the global pandemic is providing a tailwind for eCommerce. Walmart saw its eCommerce sales leap 74 percent to $21.5 billion in the quarter ended May 1.
As of now, there are just under 45,000 sellers on Walmart’s site — up from roughly 23,800 sellers a year ago. Incremental additions from Shopify would of course move the needle quite a bit.
However, Walmart will still be trailing Amazon which has 2.5 million sellers on its platform. But hey, every rebel alliance has to start somewhere, right?
And with Amazon in U.S. antitrust regulators’ crosshairs over how it treats third-party sellers, Walmart and Shopify might have found a way to combine their powers to steal a bit more of Amazon’s territory.
Big Healthcare Plays Part 1: The CareZone Acquisition
“Acquiring the technology platform of CareZone is another example of our continued commitment to helping lower the cost of healthcare for our 160 million customers who shop Walmart each week while offering convenient options across multiple channels to help them manage their health and wellness,” Walmart said in a statement.
CareZone’s technology helps consumers better digitally manage their prescription-drugs purchases. For example, the technology allows patients to scan insurance cards and prescription-drug labels, making it easier for users to determine what’s covered by their health plan or organize home-delivery instructions.
“Adding our technology platform to Walmart’s existing digital capabilities and physical reach creates a unique opportunity to redefine what the future of digital health and wellness can look like,” CareZone said in a statement.
The move will help Walmart compete more directly with Amazon in the $500 billion prescription drug space. Amazon bought PillPack, a pharmacy delivery and medication management in 2018 for $753 million, edging out Walmart with a higher bid.
But interestingly, Walmart’s deal with CareZone doesn’t include the firm’s pharmacy division, which sorts medications into pills packs and ships them directly to consumers. CNBC reported that the company’s pharmacy unit is currently involved in a lawsuit with Express Scripts, which dropped CareZone from its network over a contract dispute.
Big Healthcare Plays Part 2: Walmart’s Newest Health Center Opens
Walmart this week expanded its entrance into affordable healthcare with the opening of its latest “comprehensive health center.”
The Loganville, Ga., facility will offer primary and urgent care, labs, X-rays and diagnostics and dental, optical and hearing services at a site attached to the local Walmart store. The company opened two other Georgia health centers in 2019, and the company said the sites have thus far received high praise from the public.
“The Georgia community has embraced our first two Walmart Health locations, and we are thrilled to bring low, transparent pricing to Loganville,” Sean Slovenski, president of Walmart U.S. Health and Wellness, said in a statement. “The price and availability of quality health care is one of the biggest concerns of Americans, and Walmart Health continues our history of launching innovative products and programs that have transformed the industry and created significant healthcare savings.”
Walmart has confirmed that it’s on track to build more health centers but said the pandemic has somewhat slowed efforts at other sites. Slovenski said in a media interview that the firm is committed to opening more sites as it aims to make U.S. healthcare more accessible and affordable for all.
“It’s clear our model is working, but there’s also more to be done to ensure every family has access to care,” he said. “Walmart Health will continue to expand with additional locations opening in Georgia this year. We owe it to our communities to continue our mission to bring quality care to those who need it, now more than ever.”
The Battle Continues
Will Walmart Health Supercenters change the face of healthcare? That’s a big project, but with support from CareZone’s tech, it could work.
In fact, it’s too soon to rule anything out — from Amazon’s potential future as the nation’s leading apparel seller to what Congress might ask Jeff Bezos to whether Walmart and Shopify can break Amazon’s digital dominance. Of course, Walmart has about 120 million visitors a month to its web site, while Amazon had 2.5 billion in the month of May. So, Amazon probably isn’t losing any sleep just yet about the fate of its digital dominance.
The only thing to do is keep watching and waiting — as the race for the consumer’s whole paycheck winds on.