Tag Archives: services

by | Thursday, April 11, 2024 · 7:22 am

Walmart Buys VIZIO to Grow Advertising

No longer content to be just a retail powerhouse, Walmart wants to expand into the advertising business and compete with online rival Amazon. To that end, Walmart is buying smart TV manufacturer VIZIO for $2.3 billion.

Why buy VIZIO? Mainly because VIZIO’s SmartCast Operating System will allow Walmart to connect with consumers using innovative entertainment. (Or should we say it will allow Walmart to advertise more easily.) VIZIO has more than 18 million accounts on SmartCast, which offers free, streamed content that is supported by ads. VIZIO’s advertising business has more than 500 direct advertiser relationships, including a number of Fortune 500 firms.

Today, Walmart does sell ads at its 10,500 physical stores and websites. But once it acquires VIZIO, Walmart will be able to sell ads through streaming services on televisions, similar to how Roku and Amazon operate.

Walmart stores serve 160 million visitors each week; a whopping 90% of all Americans shop at Walmart. And while Walmart’s advertising business generated revenue of $3.4 billion, that amount is less than one percent of its total retail sales. Compare this to Amazon which generates ad sales of about 15% of its total sales and the reason for the acquisition becomes clearer.

By buying VIZIO, Walmart keeps its valuable shopping data and gains operating systems and hardware that are used to deliver ads. It expands Walmart Connect, which brings advertising partners into contact with its extensive customer base through sponsored products ads.

Group Activities and Discussion Questions:

  1. Discuss the various approaches for promoting products.
  2. Show Vizio website: https://www.vizio.com/en/home
  3. Show Walmart Connect website: https://www.walmartconnect.com/
  4. Divide students into teams. Have each team analyze how Amazon and Walmart use sponsored ads to drive sales.
  5. In teams, have students develop a promotional plan that uses VIZIO to advertise.

Source: Meyersohn, N. (20 February 2024). Why Walmart is buying Vizio. CNN Business; Peiser, J. & Gregg, A. (20 February 2024). Walmart to buy TV maker Vizio for $2.3 billion to expand advertising. The Washington Post; other news sources

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by | Wednesday, February 28, 2024 · 7:56 am

Are you ready for Temu?

Remember this year’s Super Bowl ads?

While most ads were for brands that consumers already know and buy, there were FIVE 30-second ads (at a cost of roughly $7 million per 30 seconds, plus another $15 million in coupons and giveaways) from a somewhat new-to-America Chinese company named Temu which promises prices so low that customers can “shop like a billionaire.”

The Super Bowl ads seem to have paid off already as Temu’s app rose to second place among the most downloaded free apps on Apple devices. But what is Temu and why should we care about it?

Basically, Temu is an online discount marketplace that sells low-priced items ranging from clothes, to home products, to technology products. In addition, customers earn store credit for promoting it on social media, or playing games hosted on its website.

A big difference (besides the low prices) is that shipping can take 23 days since products come from outside the U.S. Another problem is the level of customer complaints, possible unfair/unethical labor practices, as well as data privacy concerns about the information it collects. Part of the company’s success is also based on its use of a loophole in import laws which allows it to skip import taxes based on the low price of individual items, not bulk shipment.

Temu is actually the U.S. version of a giant e-commerce Chinese company called Pinduoduo (now renamed PDD Holdings, Inc.) and sells to more than 750 million users/month. Temu launched in the U.S. in fall of 2022 and now has more than 50 million active users, up 300% year-over-year.

Will shop on Temu?  

Group Activities and Discussion Questions:

  1. Poll students: Who has used Temu? What do they know about it?
  2. Show video about Temu: https://youtu.be/LYU7QEGsBtE?si=Ij7UuDjar4RKUxhs
  3. Show Temu website: https://www.temu.com/
  4. Divide students into teams and have each team compare prices on Temu versus prices on Amazon or at other ecommerce retailers.
  5. What are the main differences?
  6. Have students prepare a positioning map for Temu versus its competitors. What are the risks?
  7. OPTIONAL: Either the professor or students can place an order on Temu to observe the handling and product quality for themselves. A caveat: Be very aware of data that may be collected by the company before deciding to go ahead with buying.

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by | Thursday, February 22, 2024 · 11:41 am

The Latest in Drone Deliveries

Distribution, environment, innovation, retail, services, sustainability, technology

Ready for deliveries via drone? It’s been a lot of talk, and testing since we saw Amazon first demonstrate drones in 2013, but it seems that little has been done to implement drone delivery for the average consumer.

Well, that’s about to change. That is, if you live in the Dallas-Fort Worth right now, you are in luck. Walmart has announced it is expanding its drone delivery program to millions of people in 30 municipalities around the geography.

Why drones? They are a great way to deliver fast service for small packages. Drone delivery lowers carbon emissions, but does add some noise to the environment. For Walmart, it can impact the scale of its delivery fleet in the U.S. – 80,000 trailers, 12,000 drivers, driving 1.1 billion miles each year. Drones weigh 400 times less than cars, run on electric power, and can make a delivery in less than a third of the time.

Delivery time is roughly 30 minutes, but works best in places with open areas such as suburbs. Drones can fly at speeds up to 65 miles per hour and hover several hundred feet above the ground. Customers can watch the progress on an app which includes time and precise delivery location. The drone hovers about 20 feet above the ground, then disengages the package from a long wire system.

The company uses drones from Zipline and Wing (an Alphabet company) and has made hundreds of thousands of deliveries testing the deliveries.

However, the service is not free and not all items are eligible for drone delivery. The delivery fee for this service is $3.99 and the order can weigh up to 10 pounds. Walmart stated that the top-selling item at one of its current hubs isn’t an emergency item – it’s Hamburger Helper (ok, that might be an emergency if it’s dinner time). Products delivered tend to be a last-minute purchase or forgotten ingredient, plus medicine and treats.

Give it a try!

Group Activities and Discussion Questions:  

  1. Poll students: What are their opinions about using drones for supply chain and deliveries? Have they seen or used a drone service?
  2. Show Wing website: https://wing.com/
  3. Show a video using Wing for delivery: https://youtu.be/xfaMJgHX_4E?si=CbTn6buiixf9adJH
  4. For schools in the Dallas-Fort Worth area (or other areas using drone delivery), consider assigning a project whereby students order using drone delivery. Have them evaluate the service.
  5. In teams, have students develop a promotional plan for the drone delivery service.
  6. Who is the target market for drone delivery?
  7. What is the key message?

Source:  Birch, K. (16 January 2024). Walmart: Reducing emissions with drone technology. Sustainability magazine; Nassauer, S. (9 January 2024). Walmart expands drone delivery in Dallas as it races Amazon. Wall Street Journal; Shankland, S. (9 January 2024). Walmart expands Dallas drone deliveries to millions more Texans. CNET; other news sources.

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