Recent months have seen Wal-Mart step up to compete with Amazon for ecommerce dominance. After years of focusing on building supercenters, the Bentonville, AR-based retailer has grown the number of products it offers online fourfold in the past year. It’s also offering curbside order pickup at its stores, two-day free shipping of more than a million different products, and various other initiatives bent on gaining market share.
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But to really compete with the Seattle-based e-tailer, Wal-Mart needs to move into the realm of next-level technology where Amazon, with its Dash Button and Alexa voice-ordering device, excels.
This new automated ordering and data gathering system seems to be just that. Utilizing sensors placed on products, the system outlined in the company’s patent filing would track when and how frequently a product is used, where it’s placed in the house, and other usage data.
When the product needs to be replaced — something the sensors will be able to detect — the system automatically reorders the product.This system seems promising for many of the products that customers order via regular subscription — things like diapers, laundry detergent, coffee and other consumables. Amazon offers price savings and regular delivery on subscription items, but Wal-Mart could best that by delivering products at the exact moment when customers need them.
But questions linger, such as whether this system will require sensors inside a consumers home, and whether it requires an opt-in from consumers.
This proposed system raises key privacy issues, as many shoppers may not like the idea of sensors inside their home tracking how much juice they drink and how many chips they consume in a week. Moreover, in its quest for ultimate convenience, Wal-Mart may end up disempowering its consumers. One of the big sticking points for Amazon’s Dash buttons, according to Phillip Adcock, managing director of shopper research agency Shopping Behavior Xplained Ltd, who penned a recent column in Retail Dive, is that they overestimate consumers’ brand loyalty and assume people don’t want to shop around for other options. In fact, consumers, particularly millennials, do like to shop around, whether it’s online or in stores.
The main takeaway here, though, seems to be more about the intention and less about the specifics. Wal-Mart is going after Amazon, and it’s willing to venture well outside of its core capabilities as a retailer to do so. The next few years promise to be incredibly interesting as the world’s largest brick-and-mortar retailer and the world’s largest online retailer go head to head.
SOURCE Jeff Wells, Food Dive
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