Both Walmart and Amazon made some big add-ons and/or acquisitions this week as they attempt to widen their sphere of retail influence in a post-pandemic world. Amazon made a big push into the automotive world, while Walmart doubled down on secondhand clothing sales.
It was a busy week in the race for the consumer’s whole paycheck, with lots to watch:
Big Play of the Week: Amazon Eyes Self-Driving Car Firm Zoox
Reports out this week indicate that Amazon is in serious talks to buy self-driving car startup Zoox. Such a move would dramatically leapfrog the eCommerce firm’s autonomous vehicle efforts – and potentially make it a competitive threat to firms like Elon Musk’s Tesla.
Zoox was valued at $3.2 billion as of 2018, but a sale now would likely reflect a reduced valuation due to the rough first half of 2020. “We believe $1.1 billion would be a fair price for the company, representing a 65.6 percent haircut from its previous post-money valuation of $3.2 billion,” Asad Hussain, a mobility tech analyst at PitchBook, wrote in a research note. Reuters reports indicated that a deal could be weeks away.
Founded in 2014, Zoox has been working to develop electric-powered robot taxis in a difficult multipronged effort, simultaneously creating driverless technology, a ride-hailing network and a bespoke autonomous vehicle at scale.
Those goals would all require vast amounts of capital, but Zoox lacks the automotive partners that facilitate other startups like Cruise (which works with General Motors) or Argo AI (Volkswagen and Ford). Hit hard by the pandemic, Zoox was forced to recently halt its test fleets and lay off 10 percent of its workforce.
However, Amazon already has a team devoted to driverless vehicle technology. And in 2019, the company participated in a $530 million funding round for autonomous tech firm Aurora Innovation. So the eCommerce giant certainly has both the scale and the capital required to push Zoox’s ambitious goals.
Hiccup of the Week: Brief Amazon Outage
In a highly unusual event for Amazon, its site was actually down for a brief part of Thursday (May 28).
“Some customers may have temporarily experienced issues while shopping; however, it has now been resolved,” Amazon said in a statement to The Verge.
Amazon outages are exceptionally rare. It remains unknown how long the outage lasted or how widespread it was, according to The Verge. Some users also reported problems with AWS and Prime Video on Downdetector at around the same time that Amazon was experiencing issues.
Big Play of the Week: Moving in on Banking With Green Dot
Walmart and Green Dot have unveiled updated benefits for the Walmart MoneyCard reloadable debit card program this week, adding features sure as free cash deposits and a high-yield savings account.
The Walmart MoneyCard will now offer account holders a 2 percent annual percentage yield on money saved with a connected savings account, per a company announcement.
“Now more than ever, consumers are looking for ways to manage their money for less while saving as much as they can. The new Walmart MoneyCard allows customers to do both,” Green Dot General Manager of Consumer Products Mike Keeslar said in the announcement. “Whether you have a specific savings goal in mind or just want to set aside cash for an unexpected emergency, we have a free and easy savings solution combined with other features Walmart customers depend on to more effectively manage their money.”
The app also makes it possible to deposit funds at a Walmart location, with the money available within 10 minutes. And with ASAP Direct Deposit, consumers can get their pay as soon as two days prior to payday, or government benefits as soon as four days early.
Accounts can be opened online or via a starter kit at a brick-and-mortar Walmart location’s Money Center. Experts say the new product could be a boon for those who don’t have traditional bank accounts.
Partnership Play of the Week: ThredUp
This week, the world learned that Walmart is joining forces with resale startup ThredUp, enabling shoppers at Walmart.com to peruse thousands of pre-owned items for women and children. They can also get free shipping from Walmart with a minimum $35 order and make returns at retail locations.
“Everything that we do has been focused on making Walmart a destination for fashion,” Denise Incandela, head of fashion for Walmart’s U.S. eCommerce business, told CNBC. “We are absolutely seeing this as an opportunity to support a bigger portion of our customers’ closets.”
The retailer had been negotiating with ThredUp for about a year. This week’s deal came as Walmart has seen its eCommerce sales spike 75 percent during the pandemic. The sales rise has been particularly pronounced in the grocery area, where Walmart has always dominated. Cleaning products and hair color have also surged in popularity. The retailer has long been looking for a mechanism to drive online shoppers toward general merchandise and more high-margin areas like fashion.
Partnering with ThredUp helps Walmart expand its fashion offerings and capitalize on the sustainability trend. The retailer aims to lower prices on name brands to help a customer base that is dealing with furloughs, layoffs and tight budgets.
Of course, Amazon’s base is also dealing with tight budgets – which is arguably why the online giant is upping its position in the autonomous vehicle space. Whether this week’s expansions will play out the way Walmart and Amazon are betting remains to be seen. What’s clear is that the race for the consumer’s whole paycheck is about to get very interesting as summer 2020 begins.