Walmart to test in-home delivery program

Remember when you had to go down to the mailbox or onto your doorstep to pick up items you ordered online?

If a program Walmart is testing takes off, people may be asking that question within the next several years. The program will allow delivery drivers to leave packages inside a customer’s home, and groceries in the fridge or freezer, TechCrunch reports.

“…we want to do more in the future by delivering groceries and other orders in whatever location works best for our customers – inside the house for some and in the fridge/freezer in the garage for others,” said Sloan Eddleston, Vice President of Walmart’s eCommerce Strategy & Business Operations, in the official announcement.

When the delivery driver arrives at a participant’s home, he will enter a one-time passcode on an August Home smart lock to gain entry. Walmart says customers will be able to watch the driver enter and move around in their houses via a video feed on their smartphones. When the driver exits the home, the door will lock automatically.

Walmart has hired same-day delivery service Deliv to perform the deliveries themselves. Sam’s Club, a Walmart affiliate, partnered with Deliv in March 2016 to test a grocery delivery program.

This most recent pilot program will be available in Silicon Valley to a select group of August Home users who have chosen to participate. As TechCrunch points out, if the program is successful, Walmart may expand the list of supported smart-home providers beyond August Home.

TechCrunch further notes that Walmart has not indicated how long the program will run, nor whether the company intends to expand the trial to locales outside of Silicon Valley.

Walmart says it has designed the test to gauge how much customers are willing to pay for the service. The company has yet to disclose a pricing model.

Walmart has partnered with smart-home companies to enhance delivery operations in the past. In June, online retailer jet.com, which Walmart acquired in August 2016, teamed with Latch to install high-tech lockboxes on the front doors of 1,000 apartment buildings. Among other functions, the system allows customers to remotely grant access to their apartment complex so that drivers can deliver packages even when the customer is not home.

In its continued effort to keep pace with online retail giants like Amazon, Walmart has experimented with other augmentations to its delivery operations, TechCrunch notes. The company offered a discount to customers who had online orders shipped to Walmart stores, and tried allowing in-store employees to deliver packages from the store to customers’ homes.

In emulation of Amazon Prime, Walmart instituted a two-day shipping option that is free for rewards members.

In June 2016, the company tested a system whereby Uber and Lyft drivers delivered groceries to customers’ homes. Customers ordered groceries online, paying a $7 to $10 delivery fee. Then, a Walmart employee culled the requested items from the shelves, placed them in a bag, and called an Uber or Lyft driver to pick the order up from the store and deliver it to the customer’s home.

Meanwhile, Amazon—arguably Walmart’s chief competitor—is making its own efforts to cut delivery times. Through that company’s Prime Now program, customers can have tens of thousands of items delivered to their doors in less than an hour.

Amazon also offers grocery delivery and one-hour restaurant delivery through its Prime membership program

Moreover, the company is testing autonomous drones that can deliver items weighing under five pounds in 30 minutes or less. Last December, as part of a pilot program in the UK, Amazon completed its first drone delivery. The company says it is working with regulators to get Prime Air, as the service is called, off the ground around the world.

Featured image via Hurlburt Field

Amazon looks into military food tech

Could I interest you in a package of fully-cooked beef stew that sat unrefrigerated on a shelf for a year before being dropped on your doorstep? Or perhaps a vegetable frittata?

That’s what Amazon might have in store for us — lots of non-refrigerated pre-cooked food.

Amazon is reportedly looking into a process called microwave-assisted thermal sterilization, or MATS. This technology, developed at Washington State University, originated to meet the needs of the U.S. military. The process kills bacteria and seals meals using microwaves, allowing pre-cooked meals to remain safe for up to a year without refrigeration. The meals are easy to transport, and they only need to be heated up a bit before being eaten. As a result, they’re also quite cheap compared to fresh meals.

A Dever-based startup called 915 Labs is shopping the technology to Amazon. According to the startup, MATS has many advantages over other methods of sterilization currently being used in food processing. Traditional processing methods get rid of nutrients and flavor along with the bacteria. MATS allows dishes to be treated in a shorter amount of time, meaning that the dishes retain more of their original texture and flavor.

Amazon could get going on this new venture as soon as 2018. It would give Amazon a stronger foothold in the grocery market, which has long been a goal for the company. Prepared meals are much harder to transport than the millions of other shelf-safe items Amazon sells.

This isn’t the only move Amazon is making to chew up more of the food market. Amazon is also in the process of acquiring the grocery chain Whole Foods, and it already has a grocery delivery program in place called AmazonFresh.

Amazon has not yet confirmed that it will actually end up using microwave-assisted thermal sterilization.

Reuters has also suggested Wal-Mart may be looking into MATS as well. A company called Solve for Food is planning on setting up a MATS facility near Wal-Mart’s headquarters in Arkansas. Wal-Mart has not yet commented.

Featured Image via Wikimedia Commons

Amazon Sparks Antitrust Concerns

Amazon Inc. has recently agreed to buy Whole Foods Market Inc. for $13.7 billion as part of their expansion plans. Amazon’s sustained major growth is raising concerns with Wall Street and Washington regarding antitrust policy. Lawmakers are cautious but wish to investigate the potential ramifications this business deal will have on customers.

One U.S. lawmaker, in particular, has called for a hearing on the proposed hearing on the subjects of monopolies and their effects on the consumer base. Amazon’s shares have increased by 34 percent this year, rising to $1,003.21 per share on Friday. Despite the huge growth, market analysts have dismissed concerns regarding Amazon as a trust on the grounds that the company does not have large market concentrations in any one product category, making it unrealistic that a monopoly is established. Furthermore, Amazon has a history of helping to keep prices low and very competitive for customers.

The major concern is not that Amazon has grown too large that it can now dominate the market from a price point of view. The issue is regarding as to whether Amazon has grown to the point where competitors are discouraged and unmotivated to innovate. Competitors risk funding research and development for new services for customers because they might either be bought by Amazon, or inspire Amazon to create or improve on that innovation.

Hedge-fund managers like Doug Kass are betting against Amazon by arguing that the value for the fast-growing online retailer will be eroded by antitrust concerns. Goldman Sachs raised questions concerning the track records of tech company stocks, specifically determining whether stocks were overpriced and investors were overlooking the risks associated with government regulation policy.

Despite the political buzzing regarding Amazon’s growth, it is more than likely that the Whole Foods acquisition will go through. Only now Amazon and similar companies are being placed under scrutiny regarding competition policy, judging how the transaction affects the future of retail grocery stores, and the possible innovation repercussions that may arise. From a more political standpoint, this situation will cast a review of the antitrust laws to ensure they are working effectively to ensure economic opportunity, choice and low prices.

While many investors are now trying to short Amazon based on the value erosion capabilities of government regulation, many analysts are not worried about the Whole Foods deal greatly impacting antitrust policy. Their reasoning is that Whole Foods has just 1.6 percent of the U.S. grocery market, being overshadowed by other competitors such as Wal-Mart Stores Inc. at 26 percent of the market, and Kroger Co. at 10 percent. Shifts and enforcing of antitrust policy usually occur when a retailer controls 30 percent or more of a particular market.

For Amazon, the purchasing of Whole Foods indicates a shift in its business model from only selling products online to establishing a physical store location that is intent on attracting customers. This expansion could remain a one-time opportunity to penetrate an important market and establishing a strong position, but it will also likely lead to a collaboration between the online and physical stores, either providing a storefront for online purchases, or a capitalizing on the online selling of groceries. There is speculation that Amazon might use Whole Foods’ retail locations to launch a pharmacy business.

Monopolies are dangerous because they allow companies the ability to influence the market to maximize their profits at the expense of customers, competition and government. By being the dominant force in a market, monopolies are able to set the price that no other competitor can match, limiting choice for the customer as well as competitor innovation.

Monopolies are also able to influence government through the support of certain legislation beneficial to them, which might affect the outcomes of law that are not beneficial to society. This is why the government is so concerned with antitrust laws, and are eager to ensure they are working.

While this is the biggest acquisition of Amazon’s expansion plan, it is doubtful this will be the last, and so it is certain that this issues will arise again in the future.

Featured Image via Flickr/Fumiaki Yoshimatsu

Amazon’s $10 Bras Target Big Box Retailers, Not Victoria’s Secret

Rumors of Amazon’s plan to begin selling its own brand of $10 bras was initially seen as a play against Victoria’s secret. However, a note published by Morgan Stanley explains that Amazon’s budget bras are more of a threat to big box retailers like Walmart and Target, since Victoria’s Secret typically sells bras around $40.

Morgan Stanley’s note also points to the fact Victoria’s Secret continues to own about 27% of the market even though Walmart and Target already intimate apparel at lower prices. This indicates that people who shop at Victoria’s Secret value service and product quality over low prices, and are unlikely to be swayed by even lower prices. Amazon’s strategy, it seems, is near identical to the ones already in place at Walmart or Target.

The note added, “Given Walmart and Target’s similar price points to Amazon’s supposed $10 offering (Walmart $8-15, Target $10-20, vs. Victoria’s Secret’s ~$35) as well as a similar ‘no to little service’ model, we suspect these retailers are likely to be more negatively impacted than Victoria’s Secret should Amazon persuade consumers to start buying intimates on its site.”

Amazon is accessing a sizable market, given the fact that big box retailers make up about 50% of the US intimate apparel market. Morgan Stanley also notes, however, that intimate apparel products must meet certain fit requirements, high quality standards, and multiple style needs. Bras typically come in 5+ cups sizes, 4+ band sizes and 5-10 different colors, making it a difficult category to win.

Morgan Stanley’s survey also notes that Amazon’s Intimates category is its second least popular one on the site, suggesting the launch of intimate apparel products will be an uphill battle. Though details of the in-house collection are scarce, Amazon has already launched a similar project in Europe by the name of Iris & Lilly. The collection, so far, has been received well.

The U.S. line will most likely debut within the next few weeks, according to the Wall Street Journal.

Wal-Mart Changes Delivery Program to Compete With Amazon

Wal-Mart is terminating its fee-based, two-day ShippingPass program designed to compete with Amazon’s Prime service. In its place, Wal-Mart is lowering its threshold spending threshold for free two-day shipping down to $35. The previous threshold customers had to meet for free shipping was $50, and the previous delivery window was three to five days.

Walmart purchased start-up Jet.com from co-founder and CEO Marc Lore last year. Since then, Lore has has made a number of changes to the world’s largest retailer.

Lore, now CEO of Wal-Mart U.S. eCommerce, said on Monday. “In this day and age, two-day shipping is really just table stakes. We Don’t think it’s necessary to charge a membership for it.”

The undisclosed number of customers who purchased a ShippingPass membership will receive a refund in full. Wal-Mart began testing the program in May 2015, offering a free 30-day trial. The service offered an unlimited amount of free deliveries for $49 a year, $50 less than Amazon’s Prime service. However, the program never achieved the same degree of popularity as Primes.

Amazon Prime includes ancillary rewards, like a music and video streaming service, as well as unlimited storage for photos. Amazon also recently introduced a member-only deal for a credit card that gives 5% cash back on Amazon purchases.

Leon Nicholas, chief insights officer at Kantar Retail, said in an interview that Wal-Mart had simply missed the window of opportunity for subscription success. According to Kantar’s data, about one-third of Wal-Mart customers have Prime memberships, and have little incentive to switch.

Kantar’s data also reveals that the main reason Prime members renew their subscription at a rate of over 90% is for free two-day shipping. Wal-Mart will now provide this shipping option for customers who spend $35 or more.

Wal-Mart’s offer is applicable to 2 million products on the retailer’s website, compared to the 40 million eligible products on Amazon Prime.

Lore emphasized that the selection of items will make up a majority of what customers are already buying,”There won’t be too many products that you’ll want that won’t be available [for] two-day shipping.” According to Lore, the selection will be skewed toward essential items for everyday use.

Run-DMC Sues Retailers

One of the original members of Run-DMC, Darryl McDaniels, is suing Amazon, Wal-Mart, and Jet.com, a company which Wal-Mart owns, for selling clothing and other merchandise without the brand’s permission. In this lawsuit, McDaniel’s is asking for $50 million from the stores.

The defendants are being asked to pay for the hats, t-shirts, wallets and other infringed merchandise that McDaniels says is “extremely valuable” and having endorsements for sneakers from Adidas as well as other licensed deals.

Run-DMC started in New York City and was founded by McDaniels, Joseph “Run” Simmons and Jason “Jam Master Jay” Mizell in 1981. The group became a well-known rap group and produced albums such as “Raising Hell”. Run-DMC was inducted into the Rock and Roll Hall of Fame in 2009 becoming the second rap group to do so.

Although Wal-Mart and Amazon did not respond with a comment, McDaniels says that the companies have claimed that Run-DMC endorsed the products when that wasn’t the truth. The brand stands to lose quite a bit unless the infringement is ended.