Amazon and Walmart have a Starbucks-and-Dunkin'-like dynamic.
In the coffee world, Starbucks sets the pace. It pioneers innovations — everything from mobile order and pay to cold brew and cold foam — while its rival sits back to see what works.
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Once the market leader proves that customers like a new product or service, Dunkin' unashamedly copies it. That's a cheaper path. Starbucks has to spend more money and fail more often, while Dunkin' has the liberty of making only the changes that its rival proves customers want.
Walmart (WMT) -) sits in the same position in its rivalry with Amazon. Because it has a core brick-and-mortar audience that does not expect a lot of change or innovation, the retail giant has been conservative with its digital audience.
Amazon paved the way by making two-day, one-day, or even same-day delivery the standard. Walmart followed only years later, and the chain still trails Amazon's selection by tens of millions of items.
Now, Walmart has copied a key innovation from its rival — a move it took only 16 years to add to its online offerings.
Amazon pioneered the retail subscription model
Amazon (AMZN) -) launched its Subscribe & Save program in 2007 and has slowly tweaked it over the years.
When it first launched, Subscribe & Save offered consumers the ability to have items shipped once a month. That was bit rigid as it was sometimes hard to line up what consumers received with how much of the item they actually used in a month.
Some over-the-counter pills that people take daily, for example, are sold in 42-pill, or three-week, supplies. That made getting one shipment a month ineffective as it left customers one week short of their medicine need.
That's something Amazon has fixed, allowing for much greater customization through Subscribe & Save. The online retailer also offers up to a 15% discount for customers who use the service.
Walmart adds a subscription option
Subscriptions are convenient and they prevent people from running out of staples. They're also lucrative for Amazon because it locks customers into buying, enabling the online retail giant to plan ahead for at least a small portion of its inventory.
It seems odd that Walmart waited so long to add a service that benefits customers and the retailer. The retailer has finally added a subscription program, although it's not offering a discount to customers who sign up for subscriptions.
“When customers shop Walmart.com or the app, their baskets often contain repeat items, which means precious time is spent every weekly shopping trip finding and adding the items they’ve purchased countless times before,” Walmart said in a media statement.
Shoppers can add items to their cart — only some products are eligible — and then choose a delivery schedule. The retailer offers a lot of flexibility as orders can be as quick as every week or as far out as once every six months.
Walmart has made the move, according to to Winsight Gorcery Business, because the chain saw customers adding the same items to their digital orders regularly.
"The subscription program currently includes 'thousands of everyday essentials' including private-label products and national brands such as Great Value vegetable oil, Premier Protein shakes and Similac infant formula," according to Walmart.
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