The retail giant is trying to get out of Prime’s strategy by bundling streaming into its membership program. For more on the evolution of ecommerce, we’ll take a look at why this is a smart move.
This month, subscribers to Walmart’s membership scheme will have free access to Paramount+. It may seem like an odd combination, but as retailers catch up to Amazon’s powerful Prime membership, the blending of retail and entertainment could become the norm.
Bundling video subscription platforms with other products and services is not a new concept. Pay-TV providers and mobile operators started this kind of deal with SVOD five years ago to reduce churn.
Rewards-based retail memberships aren’t a new concept either, but commerce brands need to offer better deals if they want to attract more members and encourage them to spend.
A Walmart membership costs $98 a year, $12.95 a month and includes free shipping, fuel discounts, and early access to promotions. Add Paramount+’s Essential Plan as a benefit and save Walmart members $59 a year.
Walmart needed Paramount+ to “sweeten its $100 membership deal,” said Ryan Douglas, commerce strategy lead and program architect at Wunderman Thompson-owned Gorilla Group. says. “Walmart is lagging when it comes to e-commerce and retail compared to Amazon’s capabilities,” he says.
Walmart’s expensive memberships have so far not matched Amazon Prime’s annual $139 scheme, which offers users music, videos, games, free delivery and Whole Foods discounts. “It’s hard for a Walmart shopper to pay him an extra $100 a year, but what are the perks of that?” Douglas asks.
Douglas believes Walmart could be successful with the service as inflation forces consumers to shop at lower prices. “Many people who currently pay $140 for Prime will still be able to get some of these free services, so they may move to Walmart.”
Walmart sought to add video products to its product line when it acquired movie and TV rental service Vudu before selling it to NBCUniversal in 2020. This time it might work better.
Competitor Target offers a similar scheme to Walmart, offering four months of Apple+ as part of a free-to-join membership program.
Ed Kim, executive vice president of commerce and global services lead at MRM, which is owned by IPG, said the Walmart-Target bundle deal hints at a trend that other retailers are looking to capitalize on. “Memberships are so lucrative that it is very difficult to attract and retain retail subscribers,” he says. According to Kim, the next wave after adding video content to memberships will be gym-like services.
Disney is also reportedly considering a membership program similar to Amazon Prime that offers discounts on Disney theme parks and merchandise related to the Disney+ streaming service. CEO Bob Chapek has said he wants to cross-sell across Disney’s portfolio.
Jen Jones, chief marketing officer at e-commerce platform Commercetools, says the integration of shoppable TVs creates opportunities, but warns, “The checkout experience will be very important.” doing. If certain shows start to spike in popularity, Disney could offer more related merchandise or add flash sales to its stores soon, Jones said. “To do this, you need a commerce architecture built around flexible APIs and headless commerce that allows you to build seamless shopping experiences quickly and easily.
“Knowing that fans are fully immersed in the show while streaming the latest episode, Disney is using impulse purchases to reduce friction in the customer journey and create this shoppable video component. By adding , we are further engaging customers in the overall brand experience.”
Rich streaming data
The convergence of retail and entertainment offers great benefits in terms of data sharing. Streaming services contain the richest first-party data. By partnering with Paramount+, Douglas said, Walmart and its brands will have access to a wealth of browsing data to help improve targeting. “This makes it very powerful from a media owner’s perspective,” he says.
Being able to provide video viewing insights to brands could entice “advertisers looking to diversify away from Amazon and spend more at Walmart,” Douglas adds. .
For Disney, tying streaming data with its commerce division could help it decide which products and services to invest in, Jones said. “So next time the new season of The Mandalorian airs, Disney will be ready for high-traffic searches for Baby Yoda products, his t-shirts, and more.”
This is having an impact on the burgeoning retail media industry, where Jonathan Lewis Jones, Managing Director of Publicis Commerce, said, “We are transforming the way brands work with retailers, disrupting traditional supplier financing models. I am.”
What are the benefits for streamers?
Tom Harrington, head of television for Enders Analysis, said these services need to have lower churn rates in the competitive streaming market. “Right now, anything that helps churn and customer acquisition will be positive. Half the chance, I think Paramount+ will be tied to Thames Water,” he says.
This strategy emerged five years ago when SVOD realized that bundling with traditional pay-TV operators could slow churn, and entered into similar carriage contracts with mobile operators. “In a highly competitive market, working with retailers seems like a logical next step,” concludes Harrington.
For more on the evolution of e-commerce, check out The Drum’s latest Deep Dive.