Streaming gains importance for Amazon Prime, Walmart+ users
While free shipping of online purchases remains the most valuable feature for users of Amazon Prime and Walmart+, the streaming video services themselves are increasingly highly regarded in how retail membership bundle (RMB) users perceive value says analyst Aluma.
ALuma 3May2023
The Role of Video in Retail Membership Bundles report showed Prime Video has become the second most-important feature of Amazon’s bundle, just ahead of Prime Day discounts.
Aluma surveyed adults that purchase home video services for their households and that pay for at least one SVOD service regarding their use of Amazon Plus and Walmart+ memberships. Noting that since both services were first and foremost about online shopping, Aluma said it was highly likely that their members watched streaming video on TV and so how SVOD users perceived the importance of various bundle features would be a reliable guide to non-SVOD users, as well.
Among Walmart+ members, free local delivery was the second most-important feature, followed by the Paramount+ SVOD service which the company added to its RMB in August 2022. Walmart has now added six seasons of ad-free shows from leading AVOD platform Pluto TV to its bundle, with each line-up pre-selected by Walmart+ members and rotated monthly.
The analyst noted that having a revolving line-up of shows provides the company an opportunity to test a variety of content types to see what resonates best with their membership, which should help reduce churn and optimise content spending.
“Both Amazon and Walmart are leaning into streaming video services to boost the value of membership, and for good reason,” noted Douglas Montgomery, senior analyst at Aluma. “Prime Video benefits from being baked into by far the largest retail membership bundle, which currently serves over 70 million US SVOD households, eight times the reach of Walmart+. While Paramount+ is a good first step for Walmart’s membership bundle, it needs to be followed up with similar additions. Unlike Amazon, Walmart doesn’t offer its own SVOD service, so competitive providers may be more comfortable bundling with it.”
The report also speculated that non-Amazon retail membership bundlers may one day merge with premium video providers in order to offer better competition to the e-commerce juggernaut. It added that the technology for shoppable television, ad-targeting, etc. improves, the range of options available to retailers expands, including ad partnerships, product placements, and branded offerings to provide new revenue and exposure for its partners.
Aluma also observed that while the RMB space is at the moment a two-way battle between Amazon and Walmart, customer loyalty was critical to all retailers. Montgomery recommended larger brands who may have tried but failed to apply streaming video in their bundles – namely Target Ticket, Best Buy/Cinema Now – should now reconsider the idea. It said that with SVOD now used in roughly 85% of US households, and numerous services with over 20 million paid subscribers, the context differs greatly from even five years ago. There were, it suggested more options for content partners, plus most of the top 10 SVOD services are experiencing or will soon experience domestic saturation, making them more amenable to such partnerships.
Given that Target’s free loyalty program, Target Circle, already includes a free 6-month free trial of Apple TV+, Alumna advised the retailer to use this relationship to build a fee-based membership bundle featuring one or more subscription streaming video services. It also suggested that Best Buy’s paid membership programme currently features a litany of attractive benefits, but it could benefit from adding a variety of personal and home media services, including SVOD.
