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The retail giant is breaking out of the Prime playbook by bundling streaming with its membership program.for our Deep Dive Evolution of E-commercelet’s see why this might be a smart move.
Subscribers this month Walmart’s loyalty program will get free access to Paramount+. It may seem like a different pairing, but as retailers keep up with Amazon’s powerful Prime membership, a fusion of retail and entertainment could become the norm.
Bundling video subscription platforms with other products and services is not a new concept. Five years ago, pay-TV providers and mobile operators started making such deals with SVODs to reduce churn.
Rewards-based retail membership is not a new concept, but if commercial brands want to attract more members and incentivize spending, they need to offer better deals.
Walmart membership costs $98 per year, or $12.95 per month, and includes free shipping and shipping, discounts on fuel, and early access to promotions. Save Walmart members $59 per year with Paramount+’s Basic plan as a benefit.
Ryan Douglas, director of business strategy and program architect at Wunderman Thompson’s Gorilla Group, said Walmart needs Paramount+ to “sweeten the $100 membership deal.” “When we talk about e-commerce and retail, Walmart has been behind the curve compared to Amazon’s capabilities,” he said.
Walmart’s pricey membership has so far fallen short of Amazon Prime’s $139-a-year plan, which offers users discounts on music, video, games, free shipping and Whole Foods. “It’s hard for Walmart shoppers to pay an extra $100 a year, so what’s the benefit?” Douglas asked.
Douglas thinks Walmart could succeed with this product as inflation forces consumers to shop at lower prices. “A lot of people are paying $140 for Prime right now — they’re probably going to transition to Walmart because they’re still going to get some free service.”
Walmart has tried to add video to its offerings in the past, when it bought movie and TV rental service Vudu before selling it to NBCUniversal in 2020. Despite its “unsuccessful track record,” Douglas said the retailer has upped the game and believes it can do better this time around.
Rival Target offers a similar program to Walmart, offering four months of Apple+ as part of its membership program, which is free to join.
Ed Kim, executive vice president of commercial and global services at IPG’s MRM, said the Walmart and Target bundled deals are indicative of a trend that other retailers are looking to capitalize on. “Memberships are so lucrative that attracting and retaining retail subscription members will be intense,” he said. According to Kim, the next wave after adding video content to members will be services such as gyms.
Disney is also reportedly considering a membership program similar to Amazon Prime that would offer discounts on its theme parks and merchandise related to its Disney+ streaming service. While details are scarce, Disney CEO Bob Chapek has been vocal about his desire to cross-sell across the Disney portfolio.
Jen Jones, chief marketing officer at e-commerce platform Commercetools, said the opportunity lies in integrating shopping TV, but warned that “the checkout experience will be critical”. If a particular show starts to catch on, Disney may want to offer more related products or quickly add flash sales in stores, Jones said. “In order to do this, companies need a commerce architecture built around flexible APIs and headless commerce that enables them to quickly and easily build a seamless shopping experience.
“Knowing that fans are fully immersed in its programming when the latest episode airs, Disney is leveraging impulse buying, reducing friction in the customer journey, and further engaging customers in its overall brand experience by adding this shoppable video component.”
Rich streaming data
From a data-sharing perspective, there are huge advantages to merging retail and entertainment, as streaming services have some of the richest first-party data. According to Douglas, the partnership with Paramount+ gives Walmart and its brands access to a treasure trove of viewing data to help better target. “From a media owner’s perspective, it becomes very powerful,” he said.
Douglas added that being able to provide brands with video viewing insights could attract “advertisers looking to diversify away from Amazon to spend more at Walmart.”
For Disney, combining its streaming data with its commercial arm could help it determine which products or services to invest in, Jones said. “So, when the next season of The Mandalorian airs, Disney will be ready for high traffic searches for Baby Yoda products, T-shirts, and more.”
This is having an impact on the booming retail media industry, which is “changing the way brands work with retailers and disrupting traditional suppliers,” said Jonathan Lewis-Jones, managing director of Publicis Commerce. financing model”.
What is the use of the anchor?
In a competitive streaming market, these services need to reduce churn, said Tom Harrington, TV director at Enders Analysis. “Anything that helps with churn and customer acquisition right now would be a plus – I think Paramount+ would partner with Thames Water if there was a 50/50 chance,” he said.
This strategy emerged five years ago, when SVOD realized it could slow churn by bundling with traditional pay-TV operators, and subsequently entered into similar shipping agreements with mobile operators. “In a tough, competitive market, connecting with retail seems like the logical next step,” concludes Harrington.
For more on the evolution of e-commerce, check out The Drum latest Deep Dive.
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